Donate Online and Save on Taxes

As the last days of 2000 wind down, so too dwindle your opportunities to make tax-deductible charitable donations for the year. If you'd like to help out your favorite charity before time is up, turn to the Web. Making an online donation can be fast, easy, and safe--and it makes charting your tax deductions easy.

"Make a charitable contribution, and you help a worthy cause and yourself," says Julie Miller, a spokesperson for Intuit's Quicken.com financial Web site.

A growing number of major charities accept online donations, and numerous Web sites accept donations on behalf of nonprofit organizations. So it's easier than ever to make a quick and simple donation, Miller says.

Of course, as with anything online--including purchases--you should take precautions before handing over your credit card number to any site.

Once you're certain you're dealing with a 100 percent legitimate charity that is "tax deductible" and not just "tax exempt," follow the site's instructions for making an online contribution, Miller says. Most sites operate similar to online sales, with a shopping cart and a checkout procedure. After you're done, be sure to print proof of your contribution for your records.

The nonprofit charity donation site Justgive.org makes it easy to track your donations, says founder and chief executive officer Kendall Web. Every donation you make at the Web site appears in a password-protected file, Web says. And at the end of the year, the company will send an e-mail summary of your donations.

Miller points out that you don't actually need to file proof of your donations with your taxes, so you can still file taxes online. However, you'll want the documentation if you ever face an audit, she says.

How to Make It Count at Tax Time

Once you've made your donation and filed the documented proof, to get tax credit you must skip the EZ form and itemize, Miller says. Intuit's TurboTax software and online program can help make that task easier, she notes.

The software and Web site also offer links to Intuit's charity partner sites DonateTo.com and CharityGift.com.

In general, however, charitable tax deductions are quite straightforward, Miller says. Essentially you can deduct 100 percent of your charitable donation from your taxable income.

It gets trickier if you make your donation indirectly, Miller says. For example, if you shop at a site where a percentage of the sale goes to charity, the site needs to spell out how much is tax deductible.

Read the fine print, because making such a purchase isn't always tax deductible. For example, the Web site Charitymall.com donates a commission of 3 to 33 percent of your purchase price to a charity of your choice, but it clearly states that this contribution is not tax deductible for you.

Web Giving Grows

"The Internet really does make donating so much easier," Miller says. "And it helps the consumer to be so much more knowledgeable."

JustGive.org's Web agrees. "People want to give--but they need more information on the issues and charities," she says. A good charity site should provide the information people want so that they can make informed decisions on their own, she adds. JustGive.org offers information on over 640,000 charities (monitored by the Internal Revenue Service), as well as a guide to 2000 hand-picked organizations, she says.

While the number of people online is growing fast, Web contributions still are a minor part of the big donation picture, Web says. In 1999 online donations made up about 1 percent of the $190 billion Americans donated to charity, she says. Of that total, individuals contributed $144 billion (or 76 percent), while foundations added $20 billion and corporations chipped in $11 billion.