Finance Blog

Tax Advantages of Being Charitable

Written by Eva Rosenberg on December 8, 2010 in Tax  |   2 comments

Tax Advantages of Being Charitable Aah….This time of year is filled with generosity. Even curmudgeons are infected with the holiday spirit. Remember, however, that not everyone is enjoying this season’s largess. This year and last, many people’s lives have fallen apart. People who used to…

Tax Advantages of Being Charitable

Aah….This time of year is filled with generosity. Even curmudgeons are infected with the holiday spirit.

Remember, however, that not everyone is enjoying this season’s largess. This year and last, many people’s lives have fallen apart. People who used to be your neighbors or coworkers—or even you—are now out of work, clutching at unemployment checks, or nothing.

There are three ways you can help out—two provide tax advantages; one simply provides personal satisfaction. Let’s start with that one.

Help Family, Friends, and Neighbors

Bring joy to people you know personally. While there’s no tax break for anything you spend for the benefit of individuals, you can have such fun doing it.

Be tactful when giving presents to people who cannot reciprocate. Otherwise, your good intentions can be humiliating to the recipients. Give them what you believe they or their children would love to have—and you can afford.

Then, tell them the most cherished gift they can give you is their help with ______. Fill in the blank with something you really could use help with, and that they can fulfill. Better yet, my favorite gift for special people is a day with them. When was the last time you got to spend a day with a good friend, without distractions? What a priceless gift from your friend!

Be Charitable Right Now

We’re all looking for tax deductions, too. Write checks to your favorite charities. Make sure you get a receipt this year, especially for checks of $250 or more, to avoid losing your deduction. People in your church, synagogue, mosque, or temple can use assistance this time of year. As long as you don’t designate a specific beneficiary, your religious community can use your donations to help people in your congregation.

Don’t have money? Donate things—a car you’re not using, that old bike gathering dust in the garage, those dolls and their wardrobes that your children haven’t touched in years. As long as your items are in good condition, they’ll be welcome. Broken things are no longer acceptable to the charities—or to the IRS.

To get a value that the IRS will accept, use one of these free, reliable software tools: TurboTax’s ItsDeductible or H&R Block’s DeductionPro.

Incidentally, donations of time and services do not generate any tax deductions. But mileage and out-of-pocket expenses do!

Contribute in the Future

Do you want a big tax benefit right now without giving anything up? Put your home, life insurance, or high-value or highly appreciated asset into a charitable remainder unitrust (CRUT). The charity you choose will be delighted to help you with the paperwork.

In essence, you get the use of the asset and/or its income stream right now. The charity (or charities, if you donate to several) will get the asset when you die. This is a particularly good idea if you don’t have any family or heirs. It’s also a good idea if you have pets you want taken care of when you die. You can stipulate that the charity gets the assets in order to care for your dear pet.


One last thought: This year, seniors of at least 70½ years of age may donate up to $100,000 directly from their IRAs to charities. These donations will count toward your required minimum distributions (RMD)—without you being taxed.

Eva Rosenberg, EA is the publisher of TaxMama.com, where your tax questions are answered. Eva is the author of several books and ebooks, including Small Business Taxes Made Easy. Eva teaches a tax pro course at IRSExams.com.

Read More:
Tax Schemes and Tax Turkeys: Stay Away from Too-Good-to-Be-True Tax Advice
Winner! Winner! Winner!: Tax Implications of Winning Lotteries and Game Show Prizes
New Tax Laws for 2011
Open-Enrollment and FSAs: A Bonanza of Tax Advantages


  1. Editor, Equifax Personal Finance Blog says:

    "I tried to be generous all year long but usually during the last 3 months of the year that I made the most donations. Happy Holidays"

    Comment by Song San via ActiveRain: http://activerain.com/blogsview/2009029/tax-advantages-of-being-charitable

  2. Keto says:

    JanH – you are only lkoiong at the increase in the marginal tax rates. The real damage is done in loss of deductions that pushes up the effective tax rate considerably.

Leave a Comment

Name :

Commenting guidelines

We welcome your interest and participation on this forum, but be aware that comments will be published at Equifax's sole discretion. Please don't use this blog to submit questions or concerns about your Equifax credit report or raise customer service issues. Instead, you should contact Equifax directly for all such matters and any attempts to do so in this forum will be promptly re-directed.

Some other factors to consider when commenting:
  1. Registration and privacy. While no registration is required to visit our forum, participants wishing to post a message must register by creating an account. All personal information provided by forum members incident to registration is governed by our Terms of Use and Privacy Policy.
  2. All comments are anonymous. We'll delete your name, e-mail address, and any other identifying information, including details about your investments.
  3. We can't post or respond to every comment - As much as we'd like to, we can't post every comment, nor can we guarantee that we will respond to each individual message. All questions or comments about your Equifax credit report or similar customer service issues should be handled by contacting Equifax directly.
  4. Don't offer specific legal, tax or financial advice. All of the materials on this Site are for information, education, and noncommercial purposes only and this forum is not intended as a means of expressing views or ideas regarding any specific legal, tax, or investment advice. While offering general rules of thumb is both permitted and encouraged, recommending specific ideas or strategies regarding investments, taxes, and related matters is prohibited.
  5. Credit Repair. This blog is not intended as a venue for the discussion or exchange of ideas regarding credit repair or other strategies intended to assist visitors and community members improve or otherwise modify their credit histories, ratings or scores.
  6. Stay on topic. Your comment should be concise and pertain to the specific post in question.
  7. Be respectful of the community. The use of profanity, offensive language, spam, and personal attacks will not be tolerated and egregious or repeat offenders will be banned from future participation. We encourage disagreement and healthy debate, but please refrain from personal attacks on our WordPresss and contributors.
  8. Finally: Participation in this forum may be terminated by Equifax immediately and without notice for failure to comply with any guidelines or Terms of Use. As such, you should familiarize yourself with all pertinent requirements prior to submitting any response through the blog or otherwise. All opinions expressed in this forum are solely those of the individual submitting the comment, and don't necessarily represent the views of Equifax or its management.

Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.

Tax Archive

Stay Informed Sign up for our FREE Equifax email Newsletter