With the holiday season upon us, many people get in the spirit of giving and decide to make donations to charities. Whether it’s a local non-profit or a multinational charitable institution, charities play a large role in providing crucial benefits to our society.

Our federal and state governments recognize the benefits charities provide to our society by providing tax deductions to incentivize individuals, businesses, and organizations to make donations to charities. You can reduce your taxable income and lower your tax bill by making donations to a qualified charity within the taxable year. Not everyone will be able to deduct their charitable donations. In order to claim any charitable deduction you will need to itemize your tax deductions.

Unfortunately many people wait until the end of the calendar year to begin thinking about charitable gifts. Although it is nice to give to charities throughout the year, for tax purposes it is important to give gifts to charities by the end of the calendar year, not only to guarantee a current charitable income tax deduction, but also because the value of the gift is determined on the date of the donation.

Whether it’s donating a toy to a needy child, dropping some change in the Salvation Army’s bucket, or writing a check to your favorite charity, charitable giving is an important part of making this world a better place and can provide significant tax savings.