This month, we continue to cover Budgeting for the Holidays. Today, we specifically want to know how to save in order to give back to the community.
Rhianon had a great question about budgeting during the holiday months, and asks, “how can we also pay it forward to the local community?”
There are a lot of different ways to support nonprofits. You can donate goods, cash or even items of value to your favorite charity or organization. You do want to ensure that your donation is a win –win for you and your chosen nonprofit, so be aware of the tax laws and know how you’re going to donate.
Once you’ve donated, it’s important to get receipts—regardless of the type of gift. If your contribution is under $250, you’ll need written documentation such as a receipt or copy of a check. Make sure it has the name of the charity, date of the gift and the gift amount. If your contribution is over $250, you must have the same written documentation as well as an acknowledgment letter from the charity.
If you want your contributions to count toward 2015, then you have to make them by Dec. 31. Checks written and mailed by the end of the year will still be deductible for 2015, even if they aren’t cashed until 2016. Just remember to itemize your deductions on Schedule A of your federal 1040 form when tax time comes around. And remember, if you have any questions, consult a tax professional.
If you are on a tight budget, you can still donate your time to help others, whether it be servicing your community with a clean-up, or helping to gift wrap items for others during the holiday season. Giving of your time can have just as much impact when it comes to paying it forward to the community.
If you have a SmartMoney question you’d like answered, you can go to our website to post your budgeting questions. We’ll spend this entire month helping you get answers on how to plan for a memorable and special holiday season.
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