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How you can make Giving Tuesday work for you

Giving Tuesday is all about giving back. But your charitable donation could also work in your favor.

CHARLOTTE, N.C. — Giving Tuesday started in 2012 as a time to give back during the holidays. It’s since become a worldwide movement. Last year, online donations were up 58% with people collectively donating $808 million.

You can also help yourself by donating on Giving Tuesday as well.

"If I'm going to give, why not have that help on my charitable deductions on my tax return," CEO of Alloy Wealth Management Incorporated, Mark Henry said.

Your donation could also help you in the long run.

There are some things you'll want to keep in mind though:

  • Give to an organization that qualifies
  • Have proof of your donation

There are other tax incentives you can be thinking about as well when donating to a charity.

Qualified Charitable Distributions (QCD)

  • An option for those 70 and older is to give money from an IRA directly to a  charity. 
  • Donating through a QCD is a great way to avoid paying taxes on the money you withdraw from your retirement accounts while helping a qualified charity.
  • The money must go directly from your IRA to the charity to ensure the distribution does not count toward your taxable income for the year.

Donor-Advised Funds

  • Donor-advised funds are created or sponsored by a charity. The taxpayer creates an account with the donor-advised fund and makes contributions.
  • Donors can make contributions as frequently as they like.
  • Typically requires a minimum investment and maintenance fees.
  • The money you put into a donor-advised fund grows tax-free.

But while people are giving, there are also others out there looking to take advantage of your generosity. Experts say scammers are out there-- posing as fake charities to solicit donations for fraudulent causes. Often, they pick a name that sounds close to a well-known charity. You can avoid having your money stolen by searching the charity on a public database such as the BBB’s Wise Giving Alliance or Charity Navigator.

Henry says if you don’t have extra cash this holiday season, you can also donate your time. “We all have 24 hours a day. So give time during the holiday season," adding "Go work a food kitchen, go serve someone that is truly giving back in the finest example of it. And it really will make you feel different about your place in life when you do that.“

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