Black Friday and Cyber Monday, meet Giving Tuesday.
Charities are hoping, if you have any money left in your pocket, you'll consider giving some of it to a good cause Tuesday.
Giving Tuesday started four years ago as a way to help charities around the holiday season. Last year, it raised close to $46 million. Thousands of charities, like the Salvation Army, see it as an opportunity to reach out to new and returning donors.
The upshot is that it can have good tax implications for donors, as long as you know the rules. For example, when it comes to donating stuff, like household items, do like Santa.
"You need to make a list of all your items and then you have to estimate the fair market value," CPA Terri Moss Hornberger said.
Fair market value is "What would somebody at a thrift store pay for this item?" and not what you paid for it. The Salvation Army and Goodwill have sections on their websites with lists to help determine the fair market value of goods.
If your donation of goods has a value of more than $500, you have to fill out a special IRS form.
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Cars have a whole different set of rules. Generally you receive whatever the charity sells the car for, which might not be its fair market value.
Many charities get a huge chunk of their donations, cash or otherwise, during December.
If you give cash, make sure to keep a paper trail. Whether it's a receipt from the charity or just a canceled check, you need to be able to prove what you gave.
"If it is a cash donation, you need to have some kind of documentation, "Hornberger said. "Either a canceled check or, if it's over $250, you need a letter from or some kind of written communication from the charity."
No receipt or canceled check means no deduction. If your gift comes from your check, your W-2 can serve as documentation.
Also — and this is really important — your donation must be to an IRS-qualified charity. How do you know if yours qualifies? The IRS lets you search charities online.
You can also ask to see a charity's letter from the IRS. For help on doing further checking into a charity, see our story from last week.
Finally, what you donate is deductible in the year you give. So this year's donation would be deductible on your 2015 taxes, even if you pay the bill from your credit card in 2016.
Q&A With The Salvation Army DFW Marketing & Communication Director Pat Patey
Dewberry: What do you think about Giving Tuesday?
Patey: I think it's a great way to highlight the importance of giving to those who need a hand up during the holiday season. Black Friday and Cyber Monday seem to be all about conspicuous consumption. Ancient biblical wisdom tells us that "it is more blessed to give than to receive" and giving Tuesday seems to capture that spirit.
Dewberry: Do you expect more donations on Tuesday (and, in general do you see more donations this time of year?)
Patey: We hope to see more donations tomorrow. We raise more than 1/3 of our total support for the year during this time of year so anything we can do to raise awareness about the importance of generosity towards those who are most in need is more than welcome.
Dewberry: How important are these donations?
Patey: The donations we receive at this time of year help to fund our critical programs all year long. On any given night in the DFW Metroplex we have 1,200 men, women and children in residential treatment programs provided by The Salvation Army through the generosity of DFW donors.
Dewberry: Donations can have real tax benefits as we close out the year-is this something you talk about with donors?
Patey: Yes...we remind people that if they haven't already made their year end giving plans, that we would love for them to remember The Salvation Army. The United States is a great nation in large part because we incentives charitable giving through the tax code. This has been the foundation of the vibrant social sector that provides much needed services for the most vulnerable in our community.
