EdwardWLong.com – Thoughts and tools on charity and life

Protect your year-end donation deductions

A Q&A to help you protect your year-end charitable deductions

Question #1: You use your credit card to donate to a qualified charity on December 31 this year. You don’t pay the credit card bill until January next year. For which year do you get to take the charitable contribution deduction on your federal (IRS) income taxes? Of course, you’ll only get an charitable donation deduction if you itemize deductions on your return.

Answer: Donations charged to a credit card before the end of the year count for that year. This is true even if the credit card bill isn’t paid until the next year. In other words, credit card contributions are deductible in the year the charge is entered into the system. The timing is easy to prove — you use the date on the credit card slip or receipt. Be sure the slip or receipt shows the December date (sometimes credit card charges don’t get processed right away, and your statement might show a January date for the charge).

Question #2: Instead of using a credit card, you use your bank debit card or PayPal account (that draws directly from your bank account) to make the December 31 donation. Your bank statement doesn’t show up until January. For which year do you get to take the contribution deduction? Of course, you’ll only get an charitable donation deduction if you itemize deductions on your return. More . . .

Avoid Fake Charities using Charity DNA

Natural disasters, dread diseases or the plight of veterans – they bring out the scammers who create fake charities to grab the dollars of caring men and women.

“Charity” scammers do double damage. They take from the donor, and they take from those the donor wanted to help.

Before you donate to any group that’s new to you, investigate the group’s identity. It’s easy to do once you obtain the group’s EIN (its Charity DNA). Once you have the EIN you can do a Reverse Lookup to see if it’s recognized by the IRS.

A common fake charity ploy is to use a name that looks like a prominent charity. This builds on the confusion already out there because many existing charities having similar names. Search for charities with “disaster relief” in their name and you’ll find more than 220. Search for those with “warrior” in their name and you’ll find more than 1,400. Search for those with “cancer” in their name and you’ll find more than 3,300. Search for those with “veteran” in their name and you’ll find more than 17,400.

Tax-free IRA donations to charity back indefinitely

Give and Grin. If you are age 70½ (70.5) or older you can donate from your IRA directly to the qualified organization (see below) of your choice — tax-free! This special IRA donation rule allows you to give up to $100,000 in a calendar year. We call this the “Grin and Give Rule.”

Normally, when you take money out of your IRA, that money is taxable income to you. That’s fine, you say, you’ll just turn around and spend the money on your mortgage or give it to a charity — and get an offsetting deduction. But you might not get all or part of that deduction if, for example, you use the standard deduction or you itemize and your deductions get caught up in the phase-out rules.

Under the Grin and Give Rule, the money taken from the IRA is not taxable income to you.

And you don’t have to worry about whether you use the standard deduction, itemize or face other deduction limits.
Actually, if you were going to make a charitable deduction anyway, using the Grin and Give Rule could help you protect your other itemized deductions, and even save taxes on your social security.
And, of course, the charity doesn’t have to pay any tax either.

In other words, turning your IRA distribution into an IRA donation makes your IRA distribution tax-free! More . . .

IRS announces charity volunteer mileage rate for 2018

The Internal Revenue Service has issued the 2018 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2018, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: More . . .

My list of top charity research sites

The free charity research websites provide a wealth of information.

They’ll help you track down individual charities and view their operations and finances.
You can check charity missions, programs, spending, assets, liabilities, staff and board, and much more.

Tip: Using a nonprofit’s EIN (employer identification number) is the fastest, most accurate way to do nonprofit and charity research. More about EINs.

See my top seven sites, with a brief description of the focus of each . . .

Welcome

If you care about philanthropy, charities, consumer protection, public safety or care decisions — you’ll find thoughts and tools here. You’ll also find other things that catch my fancy.

I’m Ed Long. I’m a retired attorney and retired nonprofit executive. I’m now focusing my time as a volunteer at the end-of-life care home called Caring House and on other matters discussed on this website.

If you have questions, suggestions or other feedback use the Contact and Ask page.