December is traditionally a month for giving generously to charities, friends and family. But it’s also a time that can have a major impact on the tax return you’ll file in the New Year.
Contribute to Qualified Charities. Ask the charity about its tax-exempt status. You can also visit IRS.gov and use the Exempt Organizations Select Check tool to check if your favorite charity is a qualified charity. What You Can Deduct. You generally can deduct your cash contributions and the fair market value of most property you donate to a qualified charity.
Keep Records of All Donations. You need to keep a record of any donations you deduct, regardless of the amount. You can ask the charity for a written statement that shows the charity’s name, contribution date and amount.
Gather Records in a Safe Place. As long as you’re gathering those records for your charitable contributions, it’s a good time to start rounding up documents you will need to file your tax return in 2013. Be sure to store them in a safe place so you can easily access them later when you file your tax return.
Plan Ahead for Major Purchases. If you are making major purchases during the holiday season, don’t base them solely on the expectation of receiving your tax refund before the bills arrive. Many factors can impact the timing of a tax refund. The IRS issues most refunds in less than 21 days after receiving a tax return.
For more information about contributions, check out Publication 526, Charitable Contributions. The booklet is available on IRS.gov or order.