With only two days until Christmas and eight before the end of 2013, time's getting tight for giving -- presents for friends and family, and donations to your favorite charities. The latter can be a useful tax strategy for those who itemize their deductions.
"It's important to remember the deduction happens for the tax year in which you give the donation," said First Liberty Bank Executive Vice President Tammie Garrison.
According to the Internal Revenue Service, the following organizations are eligible for charitable contribution deductions:
- A state or United States possession (or political subdivision thereof), or the United States or the District of Columbia, if made exclusively for public purposes;
- A community chest, corporation, trust, fund, or foundation, organized or created in the United States or its possessions, or under the laws of the United States, any state, the District of Columbia or any possession of the United States, and organized and operated exclusively for charitable, religious, educational, scientific, or literary purposes, or for the prevention of cruelty to children or animals;
- A church, synagogue, or other religious organization;
- A war veterans' organization or its post, auxiliary, trust, or foundation organized in the United States or its possessions;
- A nonprofit volunteer fire company;
- A civil defense organization created under federal, state, or local law (this includes unreimbursed expenses of civil defense volunteers that are directly connected with and solely attributable to their volunteer services);
- A domestic fraternal society, operating under the lodge system, but only if the contribution is to be used exclusively for charitable purposes;
- A nonprofit cemetery company if the funds are irrevocably dedicated to the perpetual care of the cemetery as a whole and not a particular lot or mausoleum crypt.
Do Your Homework
Nevertheless, Garrison said, it is important for benevolent Oklahomans to do their homework before giving.
"Just be sure to do some research on your charity to make sure it is a legitimate charity and look into how their dollars are spent. You want to see most of their money actually going to the cause, not to director or management fees. Last, be sure to get a receipt for your giving amount," she said.