We asked financial planners to answer the most important questions about donating to charity.
Whats the right amount to give?
How can you tell if a charity is good?
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Can you get a tax break for charitable deductions?
And do you really need that receipt from dropping off clothes at the Salvation Army?
Heres everything financial planners want you to know.
Financial planning is the same waymake sure youre financially stable before you give back.
Do you pay off your credit cards in full each month?
Are you saving for retirement?
Theres no hard and fast rule about how much anyone should be givingits a very personal choice.
Make monthly and annual budgets to see whats possible.
(Thesebudgeting appscan help!)
How much are you putting into savings?
Do you have money left over at the end of each month, or are you living paycheck-to-paycheck?
Can you cut down on any specific areas of spending to give yourself some more wiggle room?
If you have a family, Boothroyd suggests getting your kids involved in helping to budget for charity.
Ask your kids about causes they care about, she says.
Give them a charitable allowance and ask them to get into the habit of researching organizations.
A charity that isnt IRS-registered or cant provide you with a tax-exempt number is a red flag.
If you arent sure about an organizations status, you’re able to verify it online.
Local charities are close to the ground and can serve local needs, and are best at building community.
National charities can work on large-scale advocacy, fund research, or have capacity to deal with major crises.
The organization should also have clear goals and be able to tell you how it measures its success.
It is better to give to a nonprofit that you feel is important, whether big or small.
you better figure out thefair market valueof your vehicle, and what the charity plans to do with it.
If they sell it, you’re able to deduct the price they sell it for.
If they plan to use the car, you’re able to deduct the fair market value.
The IRS has a pretty comprehensivepamphlet on vehicle donationthat explains the process in more detail.
(Well talk more about taxes in a minute.)
The standard deduction is a set amount determined by the government.
In that case, your charitable contribution wouldn’t provide you with any tax savings.
James Nevers, a financial planner atSoundmark Wealth Management, suggests getting around this with a donor-advised fund.
From there you could disburse your annual donations over several years.
If giving money to charity just isnt in the cards for you right now, thats totally okay.
