Hoosiers rush to donate and deduct - 13 WTHR Indianapolis

Hoosiers rush to donate and deduct

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AVON -

Christmas wasn't as merry as the Salvation Army hoped. Overall holiday fund raising was strong this year, but Red kettle donations fell short by about $85,000.

The bells are still ringing. The campaign will continue through tomorrow night. Pocket change and spare bills add up to big money. The Salvation Army hopes to raise $1 million - about a third of the group's $3.2-million fund raising goal.

Now that the Christmas rush is over, some taxpayers are rushing to make last minute donations and investments. They are out to beat the New Year's clock and cut their 2013 tax bill.

Outside the Avon Goodwill store, people lined up to make last-minute donations. The last days of the year are typically the busiest days of the year as contributions nearly double.

When a worker at the collection door asks donors if they want a receipt, most say "yes" because donations are tax deductible.

"It's a pretty big deal," said Megan McClain. As her husband and child emptied their minivan, she grabbed a receipt. "Once you get a couple of these, it is good to have the documentation for your taxes," she added.

The Internal Revenue Service has recommendations for people making end-of-year contributions.

First, make sure the organization is eligible to receive tax deductible donations. Financial contributions require a bank record, like a check or statement or a printed acknowledgement from the charity.

The fist full of change or $10 bill stuffed into a Salvation Army kettle probably can't be claimed on a tax return. For household goods or other property, get a detailed receipt for the items.

A lot of the people making donations to Goodwill say they are more interested in cleaning out their closets and getting some extra space than they are in saving a few bucks on their taxes.

The Oehring family unloaded arm loads of stuff they don't need.

"We don't want to just throw it away," Nicole Oehring said. "We want to make sure it is going to somebody who can use it. It seems like a waste not to do that."

Bags and trunks full of clothing, household goods brought in by individual donors account for almost everything Goodwill sells in its 54 stores. The organization looks forward to, and prepares for, the end-of-year rush.

Spokesperson Cindy Grahm explained, "That's huge because that revenue goes to support the mission of the organization which is to help people in central Indiana to become self-sufficient, through education and employment."

Investors are also rushing to beat the tax collector to New Year's Eve. Families with children in college or young ones planning to go, still have a few hours to deposit money into Indiana's 529 college savings plans. Contributors can cut their state tax bill by as much as a thousand dollars.

"The end of the year is always the biggest time of the year. We have the biggest rush," explained the plan's executive director Jodi Golden. She says the number of new accounts opened and contributions to existing accounts typically quadruple in December.

However, to qualify for a tax break, the money has to get there before midnight New Year's Eve or, like fireworks, the tax savings go up in smoke.

It's no surprise that the IRS has more than a few strings attached to charitable contributions.

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