According to accountants in London, one of the biggest mistakes people make during the holidays is not having a strategy in place for their charitable contributions. Most people tend to wait until the end of the year to beat the end of December deadline for qualified charity donations. If you are looking to gain the most by giving to a charity it is best to plan your year now.
Here are several steps that will help you get ahead on your charity contributions.
How Much Will You Contribute?
Many of us know how much we need to set aside to plan for our children's education and our own retirement, few know how much to set aside for charities. Talk with your accountant about the best percentage of your income that should be dedicated to your causes. You can have them set up an individual account that will hold a specific amount off of your check.
When To Donate?
Take note of your favorite charities and donate earlier. While many charities make an end of the year push, they will gladly accept donations any time of the year. All organizations need to have a monthly cash flow in order to survive. You may want to establish a monthly donation via your credit card or bank account. You may want to discuss with your employer if any gift matching or giving program is available. Some cases, you may just want to donate to on a quarterly basis. While other organizations can be helped out once a year.
One important aspect of sending out donations is to do your homework. If you have been donating to the same charity for years and are confident of how they spend money, by all means keep donating. However, if the organization is new or you are unsure of your charities spending habits ask for them to provide you with financial information and explain how funds are used and distributed. It is fine to do homework on charities as a way of protecting your investments.
The Importance Of Volunteering
Not all organizations are in need of cash, you can always take time to volunteer. Many organizations are in desperate need of bodies to help them meet their goals. While money is always essential, so is time. Simply add an hour or two a week into your calendar. Volunteering is a great way to give back that will not cost you a dime.
Take full advantage of any gift tax exclusions. If you happen to have a large estate and are looking to avoid future estate taxes you are able to make a gift to anyone that is free of any tax consequences. A couple would be able to take advantage of this tax exclusion twice without any tax consequences. This is a major benefit to wealthier households that are looking for a way to reduce the size of their estate. It is best to discuss this strategy with either accountants in London or a professional tax advisor to ensure that this is a sound strategy.