Charitable Giving
The events of 2005 have called for an unprecedented response from individuals, nonprofit organizations and government to aid victims of the natural disasters. Americans have responded with record levels of charitable giving to assist those in need.
Now Congress has acted to encourage additional charitable giving during this critical time by changing income tax laws to help Americans fund relief efforts while continuing to support their traditional charitable interests.
The Katrina Emergency Tax Relief Act of 2005 allows unlimited gifts to charity up to a donor’s total income until the end of 2005. These cash gifts must be made between August 28 and December 31, 2005, and all public charities will generally qualify.
The 2005 end-of-year gift is not limited to Katrina relief. An individual may make a 2005 end-of-year gift to qualified public charities for any purpose. A qualified charity is any entity that is allowed to receive tax-deductible contributions other than private foundations, donor advised funds, charitable remainder trusts, and similar gifts under which a donor retains income. These charities may also include churches, schools, conferences and institutions.
If you have questions, it is advisable to contact a certified public accountant or other licensed financial counselor for clarification.
Source: www.crescendointeractive.com
Tips for Giving Wisely
Tax-exempt organizations are the fastest growing sector in the U.S. economy. Over 76,000 new charities were created between 2003 and 2004. There are over 1.8 million nonprofit organizations, and the competition for funds has become intense.
1. Know your charity.
2. Find out where your dollars go.
3. Do not respond to pressure.
4. Keep records of your donations.
5. Remember: “tax-exempt” does not always mean “tax-deductible.”
6. Do not be misled by a charity’s familiar name.
7. Do not be enticed by emotional appeals.
8. Ask if the charity is registered by federal, state and/or local authorities.
9. Beware of charities offering gifts.
10. Consider giving generously.
Source: www.charitywatch.org
