Don’t get your hopes up that the extra cash you threw at a charity will help you much come tax time.
For the average 20-something, it “does you squat,” said Frank Karall, a CPA who practices in Chicago’s North Center neighborhood.
That’s because charitable giving generally only benefits you if you itemize your taxes, rather than taking the standard deduction. A single person would need to have more than $6,200 in mortgage insurance, state income tax and business deductions before a charitable deduction would benefit, according to Karall.
“You go to a charity event and someone goes, ‘Ooh, that’s tax-deductible,’ that’s only if you itemize,” Karall said. “It’s irrelevant for most of the people reading [RedEye].”
So, no, the nickels you tossed into the Salvation Army bucket aren’t going to cut it.
But a charitable donation in the name of someone who could benefit from it might make a great holiday gift, Karall said—if you get proof that the donation has been made in his or her name, it’s practically like giving cash.
“Hand your daddy and mommy a Christmas present, say, ‘Hey, I gave to the cancer institute in your name, here’s a deductible,’ ” he said.
In other words, either way, you’re probably going to have to give just for the sake of giving.
