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Despite the uncertain economy, a majority of Americans (93%) plan to give at least a little to charity this year, according to a recent Edward Jones poll.

The survey also found that 68% of Americans plan to donate the same amount as they did last year, while 17% said they would increase their contributions. Respondents indicated that their main motivation for donating to charity is the belief that it is important to help others, according to the survey.

But these payments also provide tax benefits for some Americans.

Follow these five steps to maximize the tax benefits of your charitable contributions:

1. Decide if you are going to Itemize

The pandemic provision that allowed a $300 deduction for taxpayers ($600 for couples) who did not file their taxes separately in 2021 has expired. That means if you’re not among the 11% of taxpayers who file their federal taxes, you don’t need to worry about your charitable contributions. it is better to take the standard deduction.

For the 2022 tax year, the standard deduction is $12,950 for single filers and $25,900 for married couples filing jointly, rising to $13,850 for individuals and $27,700 for couples in 2023.

2. Consider pooling your investments

If getting a deduction for your charitable contributions is important to you, but you fall below the standard deduction threshold, you may want to consider “bundling” your contributions. To do this, you make multiple years of contributions in one year to get the deduction, then don’t contribute at all in subsequent years.

For example, if you typically give $1,000 a year to charity, you can combine your savings into one year and give $5,000 to a cause or foundation that matters. Then you don’t make any donations for the next four years.

“That way, you get the tax benefits of the deduction in one year and the greater benefit of the standard deduction in other years,” Andrew King, vice president of Tax Policy and Research for Personal Financial Management at Goldman Sachs Ayco. Division, he says.

3. Collect the necessary documents

Donations are only deductible if they go to a 501(c)3 charity; use this tool to check if your charity qualifies. If you donate more than $250, you will need a receipt from that organization showing the date and amount of your contribution.

If you are donating material goods such as clothing or household items, you should estimate their market value at the time of donation. For anything worth $5,000 or more, you need a third-party appraisal.

You can also deduct expenses you incurred while doing volunteer work, but you cannot deduct the cost of your employment.

4. Be strategic about giving away shares

Giving away appreciated stock is a tax-efficient way to fund your charitable contributions. That’s because when you donate the stock, you get a credit for the charitable contribution and avoid reporting capital gains that you would owe on your taxes if you sold the stock.

However, in today’s volatile market, you may also want to offload some stocks that have depreciated.

“Then you’d be better off selling the stock and taking advantage of the capital losses and then donating the network to charity,” said Ronald Finkelstein, national associate in the Trusts and Estates Practice group. tax consulting company Marcum says:

5. Consider making a donation through your IRA

Seniors can make up to $100,000 in donations this way, and the amount counts toward their required minimum distributions. Plus, they don’t have to report it as income on their taxes. This can be especially helpful for those who don’t have other deductions, as they can get tax breaks without itemizing.

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