The end of the year is typically full of friends, family, and warm feelings toward your fellow humans. Many religions have major holidays around the solstice, and the impulse to share what you can with others is strong.

Charitable giving has a potential impact on your taxes, too. People who itemize deductions are usually able to reduce their tax bill by deducting gifts worth up to 60% of their total adjusted gross income. This year taxpayers can deduct cash given to charity up to 100% of their income.

In addition, for 2021 people who take the standard deduction are also able to claim a deduction of up to $300 for cash contributions to qualifying charities. This means married individuals filing joint returns can claim a $600 deduction even though they are not itemizing.

Of course, charitable giving is not really about the tax benefits. It’s about what you are able to share to better the lives of others in this world.

volunteer packing food to give away

We think you should give generously to charity! 

However, avoid these two pitfalls:

1.    Charities that spend a lot of their money on administration and advertising instead of delivering services don’t deserve your support.

If you hear ads for a “good cause” constantly on radio you’re right to wonder how much money actually goes to the cause and how much goes to fundraising. Too often a “charity” can get IRS certification but the money collected goes to salaries or other payments to the people who run the organization.

Unfortunately, there are scammers everywhere. A whole set of fraudsters and insincere organizers focus on preying on people’s charitable impulses. Sometimes the bad guys set up completely bogus websites and say that money donated will go to helping Afghan refugees, for example. In fact, the organization the website touts really doesn’t exist and the site is a complete criminal fraud. More often, the organizers create a charitable shell that passes IRS muster, but they pay themselves and their cohorts most of the money donated.

Before you give to an organization you have only heard about in an advertisement, check out the recipient organization on Charity Navigator.  

That site lets you check the reputation of the organization you’re thinking of giving money to and find out how it rates in delivering service, transparency of its governance, financial controls, and other indicators of trustworthiness.

Three- and four-star charities are good places to give your money, we think.  Avoid “charities” that are not listed or those with lower star ratings.

2.   Gifts to Non-US charities are NOT tax-deductible. The Federal tax rules require that if you list a charitable deduction, the recipient organization must be a US group recognized by the IRS.

Many international aid groups have a US affiliate that meets the IRS requirement. So, if  you are moved to donate money to Afghan refugees find an organization that is US-based but does its work throughout the world.

You can check whether a group you’re considering donating to is tax deductible on the IRS website.

Flag of Afghanistan with silhouettes of people

Give Now!

If you have a favorite charity that’s doing work, please give them a gift today.

You can even give through PayPal… PayPal waives its processing fees when you donate to one of the charities they are spotlighting.

Share the holiday spirit. Please give what you can. It’s the smart – and human – thing to do!

Give Wisely!  Give Today!