Wednesday, July 4, 2012

Double-check who you’re giving money to

We are truly blessed to live in such a great country where we are free to pursue the American Dream. And we don’t hold back when it comes to sharing with those who are less fortunate. I wrote about this on June 7. But sometimes we let emotions dictate who gets our money and don’t check important details as much as we should.

Take for example the not-for-profit status of charities …

You would likely assume that an organization claiming to be a non-profit is one. But suppose it isn’t. Suppose it has lost its special status with the IRS. It happens.

In fact more than 435,000 charities in the U.S. have lost their non-profit status with the IRS. So if you gave money to one of those in this group, you’d stand to lose any tax deduction you had taken.

The charity could be in big trouble too. It would have to pay back-taxes and certainly lose any goodwill it had built up for its cause.

Charities often lose their exempt status for failing to file tax returns for three consecutive years. Some because of sloppy bookkeeping, some because of outright fraud.

So before you drop the check in the mail to that charity that has touched your heart, make sure its status is current with the IRS.

The IRS has a real simple form right here. Just fill in a few blanks and you’ll know in the blink of an eye if the organization is eligible to receive your tax-deductible contributions.

Have a safe and happy Fourth of July!


No comments:

Post a Comment