December is the season for giving to your favorite charity. While many of us make donations out of the goodness of our hearts, it is nice to know that there may be a tax benefit, as well. You want to make sure your donation counts, so make sure to do your homework before you select a charitable organization to support.

Find the Right Charity

Unfortunately, it’s also the season for fraudsters to try and trick you into sending money to scam operations. Here are some tips to make sure you don’t donate to a fake charity.

1. Start your search online. Search for organizations that support causes that you care about. Once you find a few, do some digging to find reviews, complaints, ratings, and possible scams. If you find a bad review, you may want to find another charity.
2. Look at their website. Do they provide detailed information about their mission and programs? How much of your donation will go to help? If can’t find that information, look for another charitable organization.
3. Get some help. There are organizations that can help you with your search. Check out these websites to verify you are donating to a legitimate organization.

BBB Wise Giving

Charity Navigator

Charity Watch

What are the Tax Benefits of Giving

To claim a deduction for charitable donations on your taxes, you must donate to an IRS-recognized charity and receive nothing in return for your gift.

Charitable donations of both money and goods to qualified organizations can be deducted from your income taxes, which lowers your taxable income. Deductions for donations generally cannot exceed 60% of your adjusted gross income, though in some cases limits of 20%, 30%, or 50% may apply.

To claim the deductions, you must itemize deductions on your taxes instead of taking the standard deduction.

Keep these tips in mind if you want to qualify for a tax deduction.

• Qualified Charity – Examples of qualified organizations include religious organizations, the Red Cross, non-profit educational agencies, museums, volunteer fire companies, and organizations that maintain public parks.

To verify a charity’s tax-exempt status, use the IRS Tax Exempt Search Tool.

• Document the Donation – Make sure you keep track of your donations. Proof of the donation can include a bank or credit card statement or receipt from the organization. Keeping all these records will help if you are audited.
• Pay Attention to Deadlines – For your donation to be considered tax-deductible when you file, it must have been made by the end of that corresponding tax year. For example, you have until December 31, 2023, to make donations you want to claim on your 2023 tax return, which gets filed by April 2024.

The Bottom Line

Donating to charity can be a win-win situation: It’s a great way to show your giving spirit and save money on your taxes at the same time.