Tax Day Countdown — Can You Write Off Donations to LA Fire Survivors?
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Rightly so, you may have been driven to help out those fire survivors by giving through qualified organizations. If so, here are some things to keep in mind for donations when it comes time to file your taxes. As the tax deadline approaches, be sure to research just how charitable contribution deductions work for natural disasters in the United States.
Tax bills can get a little convoluted went it comes to navigating standard deductions. Let's start with a basic question about donations: Are they tax-deductible gifts?
When it comes to your federal tax return, you can deduct contributions to qualified tax-exempt charities. That means you should do your homework and check the credentials of a potential charitable organization before donating because only what you give to qualified charities is deductible.
However, keep in mind that donations to individuals are never deductible when it comes to your taxes. So, if you gave money directly to someone in need, you wouldn't be able to claim it.
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Before you progress your filing status, make sure you've checked your forms for any tax liabilities. In other words, keep in mind how much of your donation is deductible.
'A charitable donation is deductible only to the extent that the donation exceeds the value of any goods or services received in exchange,' according to Forbes.
'If you make a donation and receive something in exchange — anything from a coffee mug to a plated dinner — you can only deduct the cost of your donation less the value of the item received.'
You might be able to use some other options to help fire survivors. You could check out payroll deductions available from your employer. You might also look at options to give from your retirement assets, such as qualified charitable distributions.
If you plan to deduct your contributions, keep the receipts. It'll help you come tax time, because you must itemize your deductions to claim them on your return.
In addition to keeping tax rules in mind when donating to help the California fire survivors, be mindful of bad actors who want to take advantage of your generosity. According to ABC News, one way to avoid scam artists is to do your research and use a secure, traceable payment method instead of cash.
Caitlyn Moorhead contributed to the reporting for this article.
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