I hope you enjoyed a relaxing holiday season with friends and family. Moose, our French bulldog pictured below, always makes sure to get his turn for a photo opportunity in front of the Christmas tree.
As we step into 2025, it has already proven to be a year of resilience and reflection. My thoughts and love are with friends and family in Southern California, who continue to navigate challenges with strength and courage.
At Method, charitable giving is a cornerstone of our values. We often select charities to donate to on behalf of our clients, embracing a spirit of generosity and community. With this mindset, here are some key considerations to keep in mind when donating to charity:
Choose a Qualified Charity
Ensure the organization you support is a 501(c)(3) nonprofit or an equivalent tax-exempt entity. Use the IRS Tax Exempt Organization Search to confirm the charity’s status.
Standard vs. Itemized Deduction
To claim charitable donations, you must itemize deductions on your tax return (Schedule A). If your total itemized deductions are less than the standard deduction ($13,850 for single filers or $27,700 for married filing jointly in 2024), it may be more advantageous to take the standard deduction.
Keep Proper Records
- For Cash Donations: Retain bank records, receipts, or written acknowledgments from the charity for contributions of $250 or more.
- For Non-Cash Donations: Keep detailed receipts that include the estimated fair market value of the donated items. For non-cash donations exceeding $500, complete IRS Form 8283, and for those over $5,000, obtain a professional appraisal.
Qualified Charitable Distributions (QCDs)
If you’re 70½ or older, you can donate up to $100,000 annually directly from your IRA to a qualified charity. These donations count toward your Required Minimum Distribution (RMD) and are excluded from taxable income, offering a smart way to give back while reducing your tax liability.
