A. Year end is the best time to plan your charity donation, here are a few tips to be tax smart when it comes to donation:
1. Donate to the Right Charity
You can search if a nonprofit is a qualified charity or not at the IRS database here. For your donation to be recognized, the recipient must be a 501(c)(3) nonprofit, not 501(c)(4) which is NOT qualified.
2. Donate Appreciated Assets
If you have a stock that has appreciated greatly, you can pass ownership to it directly from your brokerage account to a charity. You will be able to deduct its higher value now, not the cost you bought it.
3. Do Not Take Any Gift
Do not take any gift the charity gives back to you, because you need to deduct such value from your donation value.