Tips for maximizing your annual giving tax deductions

See our tips for maximizing your tax benefit.

Note: Nothing in this article is intended as legal or tax advice, and World Vision recommends that you consult with your personal tax adviser regarding charitable deductions, as your tax circumstances may be different.

By James Addis, World Vision
Updated March 19, 2014 at 11:00am PDT

In the interest of making sure donors get the maximum tax benefit from their donations, while keeping within the rules, here are a few tips to bear in mind when donating to a charity — plus a few pointers on how World Vision can help.

1. Give to a qualified organization.

Of course, the best way to maximize tax credits in the first place is to ensure that you claim a deduction for all legitimate charitable donations you make throughout the tax year.

According to Charity Navigator, a monitoring group, many worthy charities are funded by donors who are able to make larger gifts as a result of the charitable tax deductions they later claim. But the organization’s website warns that the government continues to be concerned with taxpayers inflating the value of their gifts and abusing the spirit of such tax breaks.

You can deduct your charitable contributions only if you give to a qualified organization subject to the laws of the United States. (See IRS Publication 526.) Qualified organizations include those that are religious, charitable, educational, scientific, literary, or seek to prevent cruelty to children or animals. World Vision is a qualified organization, so all donations are tax-deductible in full or in part.

2. Document everything.

To claim a charitable deduction, you must be prepared to verify it. This is accomplished most efficiently with a tax receipt from the organization.

World Vision donors can get a tax receipt that documents their giving by logging on to their account online. Once you log in, select “My Giving History,” and then click the handy “Print Tax Receipt” button. Child sponsors can view their tax receipt by logging in to My WorldVision.

3. Be careful about valuation.

The IRS continues to be concerned about taxpayers who inflate the value of their donations, especially donated vehicles. The IRS carefully scrutinizes such deductions. Household goods are another category of donation that may be scrutinized. For donations of household goods worth more than $500, submit a qualified valuation appraisal with your tax return.

4. Note if you receive a benefit.

If you receive a benefit because of your charitable contribution, such as merchandise or tickets to a ball game, then you can deduct only the amount that exceeds the fair market value of the benefit you received.

5. Itemize deductions.

The only way to get a deduction for the contributions that you make is to “itemize” deductions. When you complete your taxes, you have the option to claim a standard tax deduction, or to claim your tax deductions individually on Schedule A of the IRS Form 1040 (.pdf).

If your total deductions (which include things such as state and local taxes, mortgage interest, and charitable contributions) are greater than the standard deduction, you’ll come out ahead by itemizing and maximize the full effect of your charitable contributions.

6. Consider donating assets

The sale of stock that has appreciated in value could cost thousands of dollars in taxes on the capital gain. However, these taxes are eliminated by donating the stock to World Vision. Other assets that can be donated include bonds, mutual funds, farms, property, and life insurance policies.

For more information about donating assets to World Vision, email a note to giftplanning@worldvision.org.