With only a few days left before midnight strikes on December 31^st, many U.S. donors will make a last-minute gift to their favorite causes so that they can take a deduction on their income tax forms. While charities welcome gifts any time of year, some recognize this tax incentive can be important. With this in mind, we thought it would be helpful to provide some cautions and tips for those generous procrastinators.  

Itemize to Get Charitable Deductions.

During 2020 and 2021, U.S. taxpayers that took the standard deduction and did not itemize on their tax returns could still take a deduction for their charitable contributions (up to $300 for individuals, $600 for married couples). Unfortunately, this special allowance during COVID has expired and was not extended for 2022. The IRS announced that this “above the line” charitable deduction will not be available for 2022 income tax returns. Only taxpayers that itemize their deductions will be able to get a charitable deduction this time.  

Postmark It by December 31^st

If you are mailing a hard-copy check, it must be mailed to the charity and postmarked by December 31st to be eligible as a deduction for 2022. You might want to consider going to the Post Office and using a USPS Priority envelope and keep the receipt as evidence of when you mailed the gift. Alternatively, if you donate online by December 31st, seek to get a dated receipt of your contribution for your records.

Verify Tax-Exempt Status & State Registration.

While there are some exceptions (such as houses of worship), an organization must apply for and receive charitable tax-exempt status under section 501 (c)(3) of the Internal Revenue Code to receive gifts that are deductible for federal income tax purposes. You can verify an organization’s charitable tax-exempt status at this IRS link. Also, about 40 of the 50 states require charities to register with the Attorney General’s office or Secretary of State’s office. You can check the websites of these offices to see if the group is registered. Keep in mind that this tax status or state registration does not mean either the IRS or state government agency recommends or endorses the charity.

Click to Check. 

There is always time to check out the charity before one donates. With a few clicks on the Give.org website, you can verify if your selected charities are BBB Accredited (i.e., if they meet the 20 BBB Standards for Charity Accountability). Don’t succumb to pressure to donate before taking this simple step to help ensure that your generosity goes to trustworthy organizations.

Watch Out for Charity Fraud.

Donors should not let their guard down in making last minute donations. Con artists can strike when people are rushed to plan. Review the fraud awareness tips we previously shared to help avoid potential threats that can take place now or at any time of the year.

For our Canadian friends up north, they can check with the Canada Revenue Agency for information on government registration and tax information. Also, we encourage donors to check the IRS website to find out more about charitable deduction issues. 

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 Heart of Giving Podcast

This week’s Heart of Giving Podcast features an interview with one of the BBB Luminare Award for Service winners. In 2022, BBB Wise Giving Alliance partnered with the BBB of Great West & Pacific to honor individuals in the service area of this BBB (Alaska, Central Colorado, Hawaii, Idaho, Montana, Oregon, Washington, and Western Wyoming) who demonstrate compassion, volunteerism, and community leadership. This episode interviews Emily Berliner, the COO/Founder of EBO Consulting, Inc. (a BBB Accredited Business). In hopes of supporting a vital and sustainable business economy in Alaska, she founded EBO Consulting Inc. with the vision of entrepreneurship as a collaborative endeavor to bring great ideas to the community. This service not only helps small businesses, but local nonprofits, municipal corporations, and government agencies.

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Recent Reports

We are always working with charities to publish or update reports for donors. Visit Give.org or local BBBs to check out any charity before giving. Our recently evaluated charities include:

• National Ataxia Foundation
• Seva Foundation
• International Rivers

Finally, remember to let us know by going to give.org/charity-inquiry if you are interested in seeing a report on a charity not on the list and we will do our best to produce one.