Charitable Donations

1. Donate stock instead of cash to your favorite charity. If you hold publicly traded stock that has gone up in value, you can get a charitable deduction for the full value of the stock and avoid paying any capital gain tax. EXAMPLE: You donate 100 shares of Company X that you purchased two years ago for a total of $3,000 but which had a value of $13,000 on the day the donation was made. By donating the stock directly to the charity, you get a deduction of $13,000 and you avoid paying tax on the $10,000 capital gain you would have recognized if you had sold the stock. CAUTION: You must give the stock directly to the charity. Don't sell the stock and give the money to the charity.
2. The opposite is true for donating stock that has lost value. Never donate stock that has lost value. Instead, sell the stock and donate the cash to the charity. You will then get the benefit of the capital loss as well as the benefit of the charitable deduction.
3. Deduct any expenses that you incur doing volunteer work for a qualified organization. You should obtain a written record from the charity confirming your volunteer work and whether or not you received any reimbursements for your expenses. The following are some common volunteer expenses:
   
   
   • Automobile - you can deduct 14 cents a mile for any volunteer related commuting or travel.
   • Travel expenses - If the trip is primarily related to volunteer work.
   • Long distance phone calls
   • Uniforms and other specialty clothing
4. Remember to deduct charitable contributions which are withheld from your wages such as United Way contributions that you volunteered to have taken out of your paycheck.
   
   
5. If you host an elementary or high school student (foreign exchange student, etc.) through a qualified organization, you may deduct up to $50 per month in your unreimbursed expenses as a charitable contribution.
   
   
6. Foster parents may deduct expenses as charitable contributions that are (1) larger than reimbursement payments received from the state or other agency and (2) spent for the support of the foster child.
   
   
7. If your Itemized Deductions and Standard Deduction are about the same or if you don't have enough deductions to use the Itemized Deductions, you might want to bunch your itemized deductions in one year such as paying January's mortgage payment one month early in December, paying two year's worth of charitable contributions in one year, and paying January's state estimated tax payment in December. By bunching itemized deductions in one year, you will maximize your itemized deductions in the current year, then be able to use the standard deduction the following year.
   
   
8. If you attend a charitable benefit or event for a qualified charitable organization, you can deduct the amount you pay that is more than the fair market value of the event attended. For example, if you attend a charitable dinner event where the ticket is $100, but the value of the meal would have been $20 at a restaurant, you can deduct $80 as a cash charitable contribution.
   
   
9. If you make a contribution to a college or university and receive the right to buy preferential seating tickets, you can deduct 80% of the payment as a charitable contribution. If you receive tickets for the payment, the value of the tickets is not deductible. For example, you belong to a university booster program and pay an annual membership fee of $1,000. Your membership entitles you to buy two football season tickets in a preferential designated area of the stadium. You can deduct $800 of the membership fee as a charitable contribution. If you automatically receive the two football season tickets when you pay the $1,000, then if the value of those tickets by themselves is $400, you can only deduct 80% of $600 which would be $480.