2023 is a great opportunity to take the time and opportunity to give back to others in your community. There are many different ways to give back so you can choose an option that you enjoy and works best for you. Continue reading for 3 ways to give back in 2023.
1. Volunteer Your Time
Volunteers are often the driving force of many non-profit organizations. There are also many different volunteer opportunities, which give you the choice of how you want to volunteer. If you want to help people in your community, you could volunteer at a food bank or homeless shelter. If you are passionate about animals, you can volunteer with an animal shelter, humane society, or foster group. If you enjoy helping children, you could volunteer at after-school programs. Find a charity that is near and dear to you and take advantage of its volunteer opportunities.
Nonprofit organizations also survive off of donations, whether the donations are monetary or goods. You can make it a point to donate a certain amount of money each month to a charity of your choice or routinely send goods to an organization. These donations can actually be beneficial to you as well if you are donating to a tax-exempt organization, which is categorized as a 501(c)(3).
These tax-deductible donations can reduce your taxable income for the year. To claim, you must itemize your deductions on your tax return with a Schedule A. You must also have documentation of all of your donations. Documentation can include a bank statement, credit card statements, or receipts from the charity. If you donate cash or property worth more than $250, you need a letter of acknowledgment from the charity that includes the amount of cash you donated, if you received anything in return and an estimated value of the goods & services. If you donated more than $500 worth of goods, you must fill out Form 8283. If you donated more than $5,000 worth of goods, you must include an appraisal of your items along with Form 8283.
3. Qualified Charitable Distributions
If you are 70 ½ or older, you can take advantage of qualified charitable distributions (QCD). A QDC allows you to donate to charities directly from a taxable traditional Individual Retirement Account in lieu of taking a required minimum distribution. If you want to give back to charitable organizations and you do not want the tax implications of taking the required minimum distribution from the IRA as income. QCDs will also reduce the balance in the IRA, making required minimum distributions lower in the future. This method is one of the best tax savings strategies that have the added benefit of giving back.
If you want to make charitable giving and donations a more regular occurrence throughout 2023, a financial advisor will be able to assist in making that financially possible for you. Our advisors at Plan A Wealth Management are here to help. Schedule your consultation with us today.