Charitable Contributions – Almost closed out!
Happy Holidays!
Like a lot of companies, my team and I plan out our charitable giving annually. We like to pick the organizations we’ll donate to and then, make those contributions throughout the year. Think about things like Breast Cancer in October or Autism Awareness in April. Additionally, some organizations allow company items, such as vehicles, to be donated and the value of the item must then be calculated for taxes.
Smaller companies, though, may only be able to make a single contribution to one organization. I wanted to share an important component of how the impact of any contribution is calculated, though, because all contributions are not created equal.
The IRS determines the value of a donation or contribution on this page here.
To further muddy up the water, many of us also donate personally to organizations such as Goodwill or The Salvation Army. In such cases, this will usually apply to your personal return.
Here’s the deal: you have to keep track of what and where you’ve given and even more importantly, how much you’ve given.
If you donated, for example, an older fleet vehicle, the IRS and you will almost certainly arrive at different values for that vehicle. Was it worth $2,000 or $3,000?
Getting clear on that will be critical for projecting taxes and ensuring your company is getting the top value for tax preparation.
An important part of this process is to realize – as many companies forget – that contributions cannot be done retroactively. If you gave in 2019, you have to give in 2019 – before January 1st. This might seem strange, but you’d be surprised at how many companies think the tax year for charitable contributions ends on March or April 15th.
Now, donating anything to a charitable organization is a great thing to do on many levels, but I’d also caution you to research those organizations, too. All too often, we see “charities” collecting for a cause and ultimately, very little of the money and time donated actually go towards the benefit of the victims, the research, or a solution.
Please, make sure your money is going to make an impact. If we would all simply take a few moments’ time to determine where to direct our donations, the impact – on the people suffering – would be so much greater.
Happy Holidays!