donating

Can I Write It Off as Charity?

Ashley Eneriz — Fri, 10 Feb 2017 10:30:37 +0000

A family member of mine has won some pretty sweet prizes through charity raffles. They have won tablets, and even a huge flat screen TV. When I asked them their secret, they said that they buy a lot of tickets, since raffle tickets are tax-deductible.

But wait. Is buying raffle tickets through a charity event really something you can write off on your taxes, especially when you get to take home a prize worth more than $500?

In short, no. More on that in a minute.

Just because you give money to what you consider to be a good cause, doesn't mean the IRS considers it tax deductible.

Here is a quick guide to what you can and cannot write off as charitable deductions.

1. Charity Balls and Fundraiser Buys

Many charities and churches sell fundraiser items, such as gift certificates, cookbooks, or other merchandise. You might think buying such products is considered a charitable contribution. But it's not in the eyes of the tax man. The IRS says that you cannot claim a tax deduction if you exchanged money for goods. "If you receive a benefit because of your contribution such as merchandise, tickets to a ballgame, or other goods and services, then you can deduct only the amount that exceeds the fair market value of the benefit received," according to the webpage.

This means that if you paid $120 for a $100 massage gift certificate in the name of charity, then you can only write off $20 as a donation. For charity balls, many times the organization will tell you if you can write off a portion of your ticket. However, you must deduct the fair-market cost of your meal, venue, and entertainment from the ticket cost — even though the charity may have paid little or nothing for those expenses. In many cases, once you subtract those costs from your ticket price, there is nothing left for you to write off.

So, if you really don't want that cookbook or a night at a charity event, but you want to donate and get a tax exemption, then donate money instead. If you donate cash or a check, make sure you get a receipt. You can also donate online to many organizations with a credit card, which will give you the proper documentation for tax purposes. (See also: Best Credit Cards That Give Back to Charity)

2. Raffle Tickets

Do not make the same mistake my relative made. The IRS guide to charitable contributions specifically states that you cannot write off any raffle tickets, lottery tickets, or bingo games purchased for charity. This is true whether you win something or not.

In fact, these raffle tickets are considered a bet, and you can write it off as a gambling loss deduction. However, you can only write off a gambling loss if you also report gambling winnings that same year. Gambling losses are only deductible up to the amount of gambling winnings, and must be reported on an IRS Form 1040.

3. Race or Walk Donations

Participants in a charity walk or race cannot write-off the entry fee. This is because you are paying to participate in the run or event. If you were to do a non-charity walk or racing event, you would still pay an entry fee.

If you donate money to an event like a cancer walk, not counting the entry fee, you can write it off because this is considered a straight donation. However, it is important to have proper documentation of your donation. Online donations are the easiest way to track your contributions and ensure your money goes directly to the organization.

4. Promised Donations or Pledges

Many charities hold pledge drives or allow individuals to sign up to give a certain amount of money each month. You cannot write off promised donations or pledges that you have not yet fulfilled. For example, if I signed up with Charity A to give $50 a month for a year in November 2016, I cannot claim that I donated $600 to the charity. Instead, I will only be able to write off $100 worth, for November and December. Only the actual money that's left your hands is deductible.

5. Political Donations

No matter who you voted for in the 2016 history-making election, you cannot write off any contributions you made to that party. This applies to all elections, not just the presidential vote. If you gave money to political organizations, you cannot write it off. Period. This rule applies to groups that lobby for law changes, as well.

6. Donated Time or Blood

No, you cannot write off donated time or blood, but thank you for doing so. Your generosity here won't lower your tax bill, but it will make a difference.

7. Donated Frequent Flyer Miles

Donating miles is a great way to make sure they get used for a good cause. However, you cannot write off your donation of miles. The IRS views your miles as a coupon or bonus discount. In the same tune, if you paid for a business trip or a trip for medical reasons with frequent flyer miles, you would not be able to write off the trip as a business or medical expense. (See also: 6 Ways to Sell or Donate Your Airline Miles)

8. Donated Clothing or Household Items

Donating unused items to Goodwill and other charities is a great way to clean out your closet or garage, and get a small tax kickback to boot. However, you are only allowed to deduct the fair market value of the item. For example, if you donated a designer purse that you paid $1,000 for, you cannot write off $1,000. Instead, you would need to claim the resale or eBay value of the item, which might only be $400.

There are a few apps that make tracking donations easier. Turbotax's ItsDeductible app allows you to track donations and will help you figure out the value of the item that you can write off. Donation Assistant Through TaxAct allows you to take photos of items you donate and receipts to stay on track all year long.

Make Sure Your Charities Are Truly Charities

It is important to make sure that you donate to charities that are eligible for tax write-offs. The charity must fall under section 501(c) (3) of the tax code. Don't assume that all nonprofits fit under the charity guidelines. When in doubt, ask the charity for their tax ID number for deduction purposes. (See also: How to Spot a Charity Scam From a Mile Away)

Generally, donations to organizations that are considered public charities are tax-deductible. The IRS classifies most churches, hospitals, qualified medical research organizations affiliated with hospitals, schools, colleges, and universities as public charities. The IRS also allows you to search organizations that qualify to receive a tax-deductible contribution on its site.

This article is from Ashley Eneriz of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

8 Charities You Can Trust With Your Holiday Donations

Ashley Eneriz — Fri, 09 Dec 2016 11:00:15 +0000

'Tis the season for giving, and giving to charity is the perfect way to help those in need while also helping yourself to a tax break. But how do you know which charities are the best? There are thousands of great charities out there doing amazing things with donated money, but there are also shady charities that are just out to get your money.

Here we have collected some of the highest rated charities according to Consumer Reports and Charity Navigator. Whether you are an animal lover or want to help countries in need, there is a charity supporting that cause. Don't see a charity for you on the list? Check out Consumer Reports' full list of the highest and lowest rated charities in each category. (See also: Best Credit Cards That Give Back to Charity)

For Animal Lovers

Our furry friends need our help!

1. World Wildlife Fund

The World Wildlife Fund (WWF) allows animal lovers to donate money to help species of wild animals. A $55 donation allows you to help wildlife while also earning you a small animal plush of your choice, photo, adoption of certification, species card, and gift bag. This charity is a fun one if you are looking to give a donation in lieu of a gift, since the WWF donation comes with a little gift.

2. Petsmart Charities

Petsmart Charities is very upfront with how they use donations to make an impact in pets' lives. The site says they save 400,000 pets each year. In 2015, more than $29 million went to animal welfare groups and 214,000 spay/neuter surgeries were performed. They also used 90 cents of every dollar donated to help pets directly. Individuals can donate money or volunteer with Petsmart Charities.

For Environment Protectors

Because the Earth needs us to protect it.

3. Amazon Conservation Association

The Amazon Conservation Association received a perfect score through Charity Navigator, a website devoted to helping individuals find legitimate charities and avoid inefficient charities. The charity has been around for over 15 years and conserves the Amazon. The site says a $50 donation can plant about 50 trees in a highland Andean community.

For Helping People in Need

Not everyone has a roof over their head or enough food to eat.

4. Direct Relief

Direct Relief is a nonprofit, nonpartisan organization that seeks to help and improve the lives of those affected by poverty and emergency situations. It has been one of the top charities to help with Hurricane Matthew and Syrian refugees. It has been voted as a top charity by Forbes, Fast Company, and BBB. Direct Relief also has an option to donate in tribute to someone else, which is practical for holiday gift giving.

5. Compassion International

One of my favorite organizations to donate to is Compassion International because you are able to sponsor a child. Not only do you get to choose the child you sponsor and send money to, but you also can send letters, pictures, and small gifts to them. In return, you will be given a picture of the child, as well as updates, and sometimes thank you letters. Many donors have even had the opportunity to go and meet their sponsored child. (See also: 15 Ways to Give to Charity That Fit a Holiday Budget)

For Health Advancement

A cure is out there. We just need to give scientists the chance to find it.

6. Michael J. Fox Foundation for Parkinson's Research

The Michael J. Fox Foundation for Parkinson's Research goal is to eliminate Parkinson's disease. Over $87 million went straight to research programs in 2015. Overall the foundation has funded more than $650 million to find a cure.

For Veteran Support

After protecting our freedom, our veterans should have everything they need.

7. Homes for Our Troops

Homes For Our Troops (HFOT) is a privately funded 501(c)(3) nonprofit organization that builds mortgage-free homes for severely injured veterans. Since 2004, HFOT has spent 90 cents for every dollar donated on veterans. The organization has already built 226 homes and has another 80 projects underway nationwide.

8. Operation Homefront

Operation Homefront matches specific veterans needs with donors. Donors can donate money or in-kind gifts, such as services or items. Operation Homefront accepts donated in-kind services to include, but not limited to, legal support, automotive repair, heating and air conditioning services, roofing, and accounting services. Donated goods may be items such as gift cards, household items, children's books, furniture, computers, or any other non-monetary items that are new or like new.

How to Avoid a Charity Scam

There are several more amazing charities out there, so don't think that this list is the end all, be all. However, it is important that you know how to spot a charity scam. Here are some quick tips to keep in mind:

Charities should be upfront with what they are using the funds for.
Charities should have a federal tax ID number so you can write off your donations.
It's a huge red flag if they are pushing you for donations or ask you to wire the money.

This article is from Ashley Eneriz of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Spot a Charity Scam From a Mile Away

Ashley Eneriz — Thu, 08 Dec 2016 12:30:07 +0000

When it comes to donating to charity, people have good intentions. They want to give to a worthy cause, but unfortunately, so many individuals do very little research before opening up their checkbooks.

While many charities are legitimate, there are several that should be avoided. They are the ones that rate low, with the majority of their funds being funneled into the pockets of CEOs or marketing efforts. For example, the Catholic League for Religious and Civil Rights is one charity that is low-rated by Charity Navigator, yet has one of the highest paid CEOs. (See also: Surprisingly Easy Ways You Can Support Charity)

Here's how to make sure your donation is winding up in the right hands.

Make Sure the Name Is Right

Some notable low-rated charities have made it a point to choose names similar to popular nonprofit organizations. For example, Cancer Research Institute is a highly rated charity, but Cancer Survivors' Fund and American Association for Cancer Support are both low-rated charities, according to Consumer Reports. Both of the low-rated charities have important sounding names, and it can be easy to confuse them when there are so many to keep track of.

Avoid Callers

Don't give in to pesky callers asking for donations. Often telemarketers are hired by select charities to help raise funds. However, the charity does not get all of those funds. Instead, a lot of your donation will end up going to the marketers rather than your cause. Definitely do not give any personal information, such as your credit card or Social Security number to any charity. Most importantly, if anybody pressures you to give money, then it is best to walk away.

Know Where the Money Goes

The highest rated charities are very transparent about where their money goes. You should be able to see the organization's annual expense reports or the charity's Form 990. Churches and other big religious groups are not required to file 990s, so be sure to check them out at Ministry Watch, a website that helps alert donors to fraudulent religious charities. (See also: 5 Ways Giving to Charity Is Good for You)

Don't Donate Cash or Give Through Wire Transfers

Never give any charity cash or send money through wire transfers. If the charity insists on cash or a wire transfer, it should make you suspicious of the organization. But what about religious tithing? While dropping cash in your local place of worship's donation bucket doesn't mean you are donating to a scam charity, it is still wiser to write a check or donate online. This will allow you to keep track of your charitable giving for tax purposes. If you do give cash, try your best to get a receipt.

Be on Alert

During the holidays, more for-profit charities are likely to increase their marketing. Expect more calls and emails that will appeal to your emotions. Of course you want to help wounded veterans, homeless children, and abused pets but if you have never heard of the charity, then don't rush into donating. Charity scams also are more likely to pop up after a natural disaster, such as a hurricane.

Ask a charity if they are registered, and if they claim they are, then get the registration number. Also know that most respectable charities do not ask for donations via email, unless an individual has already signed up for the mailing list.

Do Some Research

Before you donate a large sum of money to any charity, spend a few minutes researching the organization. You should be able to find the rating of charities on the Better Business Bureau, Charity Navigator, Charity Watch, BBB Wise Giving Alliance, and Consumer Reports.

It is best to decide at the beginning of the year what your annual charitable giving will be and which charities you want to donate to. This then puts you and your budget in the right place for donating money and helping those in need.

Charity scammers take advantage of people's goodwill and desire to help. However, these scammers can steal more than just your money. They can steal your identity if you give out too much information. Give to causes you care about while also protecting your bank account and personal information.

This article is from Ashley Eneriz of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

13 Money Goals You Can Still Reach by 2017

Mikey Rox — Fri, 12 Aug 2016 09:00:08 +0000

We've passed the halfway point of 2016, and maybe you're down on yourself because you haven't achieved some of your annual financial goals. Life can sometimes derail our money-saving plans — and that can make you feel like a failure. But the year isn't over yet. So chin up, buttercup! It's never too late to give your money a makeover, like with these 13 money goals that are still attainable by 2017.

1. Increase Your Emergency Fund

Whether you want to increase your fund by $500 or $1,000, there's still time to build your bank account.

Ideally, you should have about three to six months' of income in reserves. If you're not in a position to save this much, aim for an emergency fund sufficient to help you get through most unexpected expenses, like a home or car repair. You'll have to make a few sacrifices, such as spending less on entertainment or shopping less, but with five months left in the year, you can hit this goal by saving $100 to $200 a month.

2. Start Planning for Retirement

Your retirement account isn't going to grow itself. The older we get, the more important it is to plan for the future. If you haven't started saving for retirement yet, now's the time to get serious. Talk to your employer about enrolling in the company's 401K plan. If this isn't an option, open an Individual Retirement Account (IRA) through your bank or with the help of a financial adviser.

3. Increase Retirement Contributions

Then again, maybe you're already saving for retirement, but feel now's the time to increase your contribution. Whether you're currently contributing 2% or 5% of your income to a retirement account, set a goal of increasing your contribution by at least 1% before the end of the year.

4. Reduce Expenses

It's easier to attain money goals when you reduce expenses and free up cash. For the next four to five months, eliminate or reduce at least one expense a month. This can include downgrading your cable package or getting rid of cable altogether (it's a common trend these days), using coupons to lower your grocery bill, or riding your bike or carpooling to work a few days a week to save on transportation costs. The savings add up quickly, and before you know it you'll have a bigger bank account.

5. Create a Second Income Stream

Our income isn't always enough to meet our money goals. Rather than complain about your situation, think creatively about ways to increase your income. Working a side hustle a few days a week can generate money to build your savings account, pay off debt, or start saving for retirement.

If you're an expert in your field, offer consulting on the side. Or if you have excellent writing skills, look into freelance writing opportunities and share your knowledge. Don't think your second income stream has to be glamorous, either. If you don't mind odd jobs or getting your hands dirty, you can make extra money around the neighborhood cleaning houses, doing handyman work, or cutting grass.

6. Give Up a Costly Habit

Bad habits are expensive.

Before the end of the year, make a concerted effort to eliminate at least one bad habit. This includes things like drinking too much alcohol and smoking, as well as habits that aren't as dangerous to your health but detrimental to your finances. Do you have a routine of stopping for coffee and breakfast every morning on the way to work? If you can eliminate this $5 daily purchase from your budget, you'll save about $25 a week, or $100 a month.

7. Simplify Your Life

Less can be more. If you're tired of clutter or feel the stuff you own takes too much of your time and energy, set a goal to simplify and unload a few possessions. Selling off items can put extra cash in your pocket, plus you can save money on storage fees and free up space in your house, garage, attic, or basement.

8. Give to Charity

It's not too late to make a charitable donation and give back. While you're simplifying and decluttering your life, consider donating a few items to your favorite organization. You'll not only help someone in need, you can write off charitable donations on your tax return and lower your tax bill.

9. Purchase Life Insurance

Life insurance is necessary for everyone, but especially for people with children and other dependents who rely on their income. A policy can cover the cost of a funeral and burial, plus pay off any expenses you leave behind, such as a mortgage and credit cards.

There are no hard-and-fast rules regarding the amount of coverage to purchase, but some money experts recommend a policy that's eight to 10 times your income. If you already have a policy, review your coverage to make sure it's adequate for your needs. If you don't have a policy, it's time to get one.

10. Budget Your Money

If you overspend every month and can't get ahead, the problem could be poor budgeting. The truth is, attaining many of your money goals by 2017 will require an airtight budget. You have to know what's coming in and what's going out before you can come up with a plan for your personal finances. Now's the time to put pen to paper and review your income and expenses to determine a reasonable amount to spend in various spending categories, such as food, transportation, entertainment, shopping, etc.

11. Say No to Credit Card Debt

Credit cards are simple and convenient, but they're also a source of pain and suffering if you let balances grow out of control. Before the end of the year, come up with a plan to pay off or pay down at least one credit card. Don't stop until you're debt free. (See also: How to Get Rid of Interest on Your Credit Card Debt)

You can achieve this goal by paying more than your minimums every month. Or negotiate a lower interest rate with your creditors so that more of monthly payments go toward reducing the principal. Since the amounts we owe make up 30% of our credit scores, paying off credit cards also increases your credit score.

12. Automate Your Finances

Paying bills on time also contributes to a higher credit score. Forgetting a due date and paying late can result in late fees, and when bills arrive 30 or more days past due, your credit score suffers. To avoid these situations, automate your finances. Set up automatic bill payments between your bank and creditors and you'll never miss another due date.

13. Check Your Credit Report

Everyone should check their credit reports at least once a year and dispute erroneous information. If it's been more than 12 months since you last reviewed your reports, visit AnnualCreditReport.com today and get a free copy of your reports from each of the three bureaus. Credit report mistakes and fraudulent activity can drive down your FICO score and trigger credit rejections and higher interest rates on loans and credit cards — and when you're charged higher interest rates, you pay more for credit.

What are some of your money goals that you'd like to reach by the end of the year? How do you plan to meet those goals? Let's discuss in the comments below.

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This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Make Money and Declutter by Selling These 5 Unlikely Treasures

Kyle James — Wed, 22 Jun 2016 10:00:10 +0000

You may want to take one last peek through those boxes sitting in the garage before donating the contents to your local Goodwill. Turns out there are some surprising items in your home that others are willing to take off your hands for significant cash. Your junk being another person's treasure has never been truer. Here are the items worth knowing about.

1. Coffee Mugs

A couple years ago, I accidentally stumbled upon the underground world of coffee mug collectors. I was doing my annual eBay roundup of all the items in my home that I didn't use, and on a whim, I threw in two coffee mugs that I had no need for. I snapped some pictures, wrote a brief description, put up the eBay listings, and lo and behold, a bidding war erupted on the last day of both auctions. I ended up selling a House of Blues mug for $23 and a Starbucks mug for close to $28.

I was so blown away with the success of my coffee mug auctions that I decided to do some research. I discovered that there are many eBay sellers who fervently search local thrift stores for coffee mugs that they can turn a quick profit on. Coffee mugs that sell really well include anything Disney, vintage restaurant mugs, Starbucks, vintage Pyrex, and mugs with famous people, places, and TV shows on them. Always search eBay "completed listings" to determine the value of coffee mugs. The eBay app allows you to do this while you're in the thrift store to determine if you may have just found a hidden gem.

2. Name Brand Clothing

If you have a closet full of clothing you don't wear anymore, considering selling it rather than donating it. If it's a brand-name label, you have a much better chance of cashing in as buyers are more familiar with sizing and styles. Brands that sell well include American Eagle, Gap, Banana Republic, Land's End, Calvin Klein, Express, and Abercrombie & Fitch. Consider sites like Poshmark, which allow you to create a listing within 60 seconds and quickly have your unwanted clothing in front of a million prospective shoppers. Many Poshmark users have actually created a full-time income for themselves by selling thrift store finds.

Perhaps the best way to sell clothing online is to utilize the power of eBay. Not only can you take advantage of their huge reach, but they make the transaction easy via their interface. Be sure to take good pictures of the item and write an honest description. I like to package the item and weigh it before creating the listing so I can charge accurate shipping fees.

Also, because eBay users are searching for the exact item and size you're selling, be careful when creating auction lots with multiple clothing items. For example, if you're selling men's jeans and you have two pair size 34x34, and one pair in size 33x34, you'll have a tough time selling all three together in a lot, even if they all basically fit the same. You'll have much better success selling the 34x34 pairs together and the 33x34 separately.

Also, don't forget about more traditional ways of selling clothing via a yard sale or at a community or church sale. While you might not get top dollar like you can online, you'll be able to unload a lot of inventory quickly.

3. Baby Gear and Clothing

Don't put your unused stroller, crib, or playpen in the attic. The same can be said for gently used baby clothing and gear. Because baby items are typically outgrown before they wear out, they make for terrific items to sell both online and at local baby shops. Brands that typically sell well include Baby Bjorn, Gymboree, Baby Gap, Hanna Andersson, Graco, Peg Perego, and Children's Place. For best results, sell clothing online via eBay and bundle items together to make complete outfits. They tend to sell really well this way, especially when you take good pictures and write a detailed description.

When selling bulkier baby gear, you have two solid options. You can sell it on Craigslist if you're comfortable with the process, or you can opt for local retail shops like Children's Orchard, Once Upon a Child, or Kid to Kid. Name brands in good to excellent condition have a premium and you can typically get a great deal if you're willing to accept store credit as payment. You can then use the proceeds to buy the sizes that your kids are currently wearing.

4. Past Amazon Purchases

Are you aware of a service from Amazon called Amazon Trade-In, which buys back your past purchases that you have no need for anymore? Once you're signed-in, Amazon will go back through your order history and tell you what they'll buy back, and for how much. I recently tested out the service and was happily surprised when I discovered they would buy back a rarely played Xbox game that we gave our son for Christmas. We bought it for $25 over six months ago, and they'll buy it back for $14. This buyback amount was 25% better that what our local GameStop would pay for it. The best part is Amazon uses prepaid shipping labels which allow you to ship the item back free of charge.

Also, it's worth noting that items don't have to be purchased from Amazon to be eligible for a buyback. From the Amazon Trade-In homepage, click on "Find More Items" and simply enter the item you want to sell, and they'll give you a price quote. (See also: 7 Ways to Make Amazon Pay YOU!)

5. Old Smartphones

Depending on the age, condition, and demand for your old smartphone, you can make a pretty penny by selling it online. Rather than throwing your old smartphone in the desk drawer, sites like Swappa and Gazelle are great options to consider. Both will happily take your phone, pay the shipping, and give you cold hard cash for your device. You can quickly get a free quote from them by answering a few questions about your smartphone. Do you have an old iPhone 5 (16GB) collecting dust? Swappa will buy it for $112. While devices can show normal signs of wear and tear, they must be fully functional and ready to activate to get top dollar. They'll take broken devices too, just don't expect a big payday.

If you're the type of smartphone user who always needs the newest and greatest, consider selling your old smartphone to one of these sites before the new model is released. By doing so, you'll get top dollar as prices for last season's model plummet once the new model is released. Once you get word of the impending new model, start strategizing your sale and have a cheap smartphone at the ready as a backup during the transition period.

What stuff laying around your home have you been able to sell for some extra money?

This article is from Kyle James of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

What You Can Buy With $5,000

Carrie Kirby — Wed, 18 May 2016 09:30:22 +0000

If I had a million dollars…

So the song by Canadian alt rockers Barenaked Ladies goes. While it may be fun to imagine what you would spend a cool mill on, it's a lot more realistic to imagine that you may find yourself with $5K to dispose of as you wish. Maybe you got a big tax refund this year, or an unknown uncle left you a little something.

Whatever the backstory, here are 11 fun and/or responsible things you could do with $5,000.

1. Pay Off Credit Card Debt

The average American household with credit card debt owes about $15,000. If this is you, making only the monthly minimum payment at a very typical 15% annual interest rate, it could take you seven years to pay off — and you'd end up wasting $8,000 to $9,000 on interest.

Pay down $5,000 of that debt now, and you could finish paying the rest in half the time, for only about $3,000 total interest. (See also: Use a Balance Transfer to Pay Off Debt Faster)

2. Get a Cat

Half leopard, half house cat, the Bengal is a beautiful animal and can be yours for just about $5,000.

If being ignored by one feline doesn't cut it for you, you can get more cat for your cash by adopting. With an average fee of around $100, you could bring home 50 felines for $5,000. Then again, maybe you'll need to save some money for litter and food — and a really good vacuum cleaner.

3. Start a Business

There are a number of low-overhead businesses you could start with a $5,000 or smaller investment, many of them work-from-home gigs such as being a virtual assistant (expenses include computer, phone, Internet, and possibly training and marketing). You could also buy a small franchise, such as a hot dog cart, for $5,000 or less.

4. Take Your Inner Geek on a Vacation of a Lifetime

For about $5,000, you can take the Lord of The Rings New Zealand Tour. The trip includes staying at the adorable Hobbit Hotel — but second breakfasts and elevenses are on you.

5. Bank It

Interest rates are still low, but you can get some return on your money if you deposit it.

EverBank currently pays 0.61% on its money market accounts and compounds interest daily, so after five years of compounding interest, you would have $5,154. So basically, after five years of saving, you'll have earned enough interest to buy a scooter or have your house cleaned once.

4. Give It to an Old Person: Future You

If you're not regularly depositing money in an IRA from your paycheck, you can meet almost the entire year's maximum deposit with a $5,000 lump sum contribution.

Because traditional IRAs grow tax-free, you might be amazed at how much your $5,000 deposit could blossom into by the time you retire. Assuming a 7% annual return, if you deposit $5,000 at age 20, you could have more than $50,000 by age 65. Not bad!

5. Indulge Yourself for a Year

For $5,000, you could get a one-year subscription to a whiskey club ($600), a Kobi beef of the month club ($1,250), a seafood of the month club (about $1,660), a candy of the month club (about $300), and order one in-home massage per month ($1,200). A great deal for xenophobes, freelance writers, or folks on house arrest!

6. Donate to Charity

It will make you feel great, and you can deduct your gift from your taxable income. Make sure your recipient is a qualified nonprofit — you can look it up on the IRS website — and remember that you need a letter of verification from the charity for all donations over $250.

9. Eat a Burger

The Fleurburger 5000, served at Hubert Keller's Fleur eatery in Las Vegas, is made with Wagyu beef, foie gras, shaved black truffles, and truffle oil. It comes with a bottle of fine wine — and fries.

10. Grill Your Own Burgers In an Outdoor Kitchen

While you can flip burgers on the most inexpensive hibachi, making your yard into a plein air living space where you can comfortably cook starts around $5,000 for a decent grill, an island with a built-in refrigerator, and a dining set.

11. Skip Waiting in Lines for a Year

Estimates for how much time Americans spend waiting in line in a lifetime vary from two to five years. That boils down to hundreds of hours per year! You can pay line waiters about $25 per hour on TaskRabbit or through local services. So for $5,000, you can get out of 200 hours of line waiting. Pro tip: Don't blow it all on one phone.

What would you do with $5000?

This article is from Carrie Kirby of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Winter Is Coming: Make These 6 Money Moves Now

Shannah Game — Wed, 04 Nov 2015 13:16:21 +0000

As we approach the end of the year, it's important to make sure that your money is headed in a good direction. It's all too easy to put your finances on autopilot and not think twice about the money moves you're making. But a completely hands-off approach can be a recipe for disaster. Here are six money items to tackle this fall.

1. Health Insurance Open Enrollment

Having health insurance is no longer an option. In fact, the fine for not having health insurance goes through the roof in 2016. In 2016, you'll pay the higher of either 2.5% of your yearly household income or $695 per person if you fail to have a health insurance policy that meets the government's definition of minimum essential coverage. That's a hefty chunk of change.

Open enrollment starts on November 1, 2015 and only runs until January 31, 2016. You only have during that window to make changes to your health care plan unless you fall under a special exception, such as marriage, giving birth, or losing coverage at work. Don't get lazy though; you only have 60 days after one of those events to get insurance coverage. If you don't, you'll need to wait until the next open enrollment.

2. End of Year IRA Contributions

Contributing to your IRA, whether it's a traditional or a Roth plan, can be an important component of your retirement plan. And the sooner you start, the more money you can accumulate over your lifetime. Don't forget that you can make your IRA contributions for 2015 all the way up to the April 15, 2016 tax filing deadline.While traditional IRA contributions may qualify for tax deductions, Roth contributions generally do not. Tax deduction or not, contributing to your IRA is simply a smart financial move.

3. It's Bonus Time

The end of the year means that bonuses are right around the corner. Do you have a plan for your bonus? Maybe a trip somewhere amazing, or buying that new iPhone 6? Why not plan on using all or some of your bonus to help further your financial goals, either by paying off debt or saving and investing? Also, remember that your bonus is often based upon your performance, so now is the time to step up your game and talk with your boss about how you might maximize your check.

4. Create a Money Filing System

Before the end of the year, it's a good idea to get a money filing system in order to keep track of all your important documents, tax information, and all those other loose financial papers that need a home. Keep at least your last two years tax returns, any insurance documents and policies, and if you are self-employed, all those receipts that you will need for tax time. Whether you use a service like Dropbox, a password secured vendor, or even an old school accordion file at home, make sure your filing system is secure and easy to access.

5. Entrepreneur Taxes

When you're an entrepreneur, you've got to think a little differently about the end of the year. For you, the end of the year is a good time to make an inventory of all the tax deductible purchases needed for your business. On your list, you might include things like computers, phones, software, equipment, books, and new marketing systems. Always make sure you save the receipt, and buy the items before December 31, 2015 to count toward this year's deductions.

6. Donate

Donating toward the greater good can be a terrific feeling, but there are a few rules you need to follow if you are going to deduct the expense as part of your 2015 taxes. If you choose to make a monetary donation, you must ensure that you are giving to a proper non-profit 501(c) (3) organization, and you must have some sort of bank record, cancelled check, or receipt for your donation.

If you choose to use a credit card to donate, make sure you donate before December 31, 2015. If your credit card bill isn't paid until January 2016, but you made the donation in 2015, it still counts for this year. If you plan to donate clothing or household items, they generally must be in good shape. Organizations like Goodwill will always ask you for the approximate value (known as fair market value) of your donations. Just be aware that if you donate over $500 of goods or clothing, you will need an appraisal of the value regardless of whether the items are in good shape or not.

What are you doing to prepare your finances for winter?

This article is from Shannah Game of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Best Money Tips: Contributing to Charities Without Donating Money

Ashley Jacobs — Thu, 24 Oct 2013 14:21:05 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found some stellar articles on contributing to charity without donating money, saving this holiday season, and risks happy people take every day.

Best Money Tips: Teaching Kids How to Donate Money

Ashley Jacobs — Wed, 14 Sep 2011 10:00:19 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found some great articles on teaching kids how to donate money, cutting the cost of college tuition, and why you need to carry cash.

Cleaning Out for a Cause: Make a Noncash Tax-Deductible Donation

Meg Favreau — Tue, 28 Dec 2010 13:00:10 +0000

If you've ever thought about moving during December, I have one contraction for you: don't. I was stupid enough to do so this year, taking the stress of hauling my belongings to a new apartment, finding a storage unit, and trying to remember how my bed frame fits together and adding it to an already busy schedule of shopping, baking, and holiday parties.

There is, however, one great thing about moving during December: It forced me to go through my belongings and make a substantial goods donation to my local Goodwill store. Since Goodwill is a registered 501(c)(3) charity organization, I can deduct the value of what I donated to them when I submit my taxes in April (er, did I say April? March. I'll definitely get them in by March this year).

If you're thinking of donating gently used clothing, furniture, or other items before the end of 2010, here's what you need to know:

Make Sure the Charity You Donate to Is Eligible

Not every thrift store is a registered 501(c)(3) organization. Before you donate your goods, call the store to make sure that donations to them are indeed tax deductible, and read more about qualified organizations on the IRS website.

Make a List of What You're Donating

Just in case you fall under the watchful, auditing eye of the IRS, always keep a detailed list of what you've donated so you can back up any deduction claims.

Be Reasonable in Estimating the Value of Goods

When you're figuring out how much to claim as a deduction, you need to estimate what the IRS refers to as the “fair market value” of each item. For example, if you're donating a used pair of jeans that you bought for $40, their fair market value isn't going to be $40 — more likely $3-$10. If you need help estimating the fair market value of your goods, take a walk around a thrift store and see how items are priced.

Give Useful Items

Charities like Goodwill have to go through a lot of stuff, and it makes their job even more difficult if you bring in your broken printer and pass it off as working just because you want to claim it as a tax deduction. If something is broken and unrepairable, don't give it to a charity to deal with.

Get a Receipt

Always, always, always get a receipt from the charity you're donating to. You can't claim your deduction without it.

Fill Out the Appropriate IRS Form

According to the IRS, "If your total deduction for all noncash contributions for the year is over $500, you must complete section A of Form 8238" (PDF). If you are deducting one item that is worth over $5,000, you must complete Section B of the same form.

So take a day to clear out your closets, and make sure to get your donations in by December 31. It'll help you have a happy new year with less taxes — and less clutter.

This article is from Meg Favreau of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Charitable Giving: Give in Order to Receive

Nora Dunn — Tue, 23 Oct 2007 23:13:41 +0000

The idea of giving away what you have especially if you don't have much is a tough one to wrap your head around. But if you truly want to be rich (both literally and figuratively), getting into the frame of mind of giving is a step in the right direction.

When I joined Rotary, I wasn't sure just how much time I could dedicate to the club's charitable fundraising and related activities. I had a business to run, an active social life, and many extra-curricular activities to round out my 16 hour days.

But it was only after I started to give freely of my time and money towards worthy causes that my life became enriched in ways I couldn't have predicted:

My business doubled in size in one year, completely independent of the people I was interacting with.
I met like-minded people with whom I still share extremely strong bonds.
I found new income-producing opportunities.
I received tax breaks for my charitable contributions.
I adopted a number of charitable projects separate from Rotary, which enriched my life and career in amazing ways.

Call it karma, call it good vibes, or anything else that fits the bill; when I gave of myself (be it time or money) without expectation of getting anything in return, I always received ten times the benefit.

A friend of mine who is quite wealthy said he wakes up every morning, and is thankful for all that he has. He feels blessed, and asks with cupped hands for continued blessings. Then throughout the day, he gives away all he has that he doesn't need. I have seen his generosity in action, and he doesn't do it with any ulterior motives. He believes that if he gives away what he has, he will always be able to be thankful with cupped hands and will receive what he needs. So far, it has worked for him!

I will note that he doesn't do anything financially irresponsible in his benevolence, putting himself in a fiscally risky position (he ensures he and his family is well-provided for). He just gives with unparalleled generosity and is always rewarded in amazing ways.

You don't even have to limit your giving mentality to charitable causes; just being in a generous frame of mind and helping others for the sake of helping can bring back amazing results. The next time a friend needs help moving, consider dedicating your afternoon to the cause instead of coming up with an excuse as to why you can't go.

In Suze Orman's 9 Steps To Financial Freedom, one of the steps is all about giving, and the psychological benefits of releasing an iron-clad grasp on your money.

Where Does All My Money Go has a fabulous post on employer-matching programs. This is a great way to double any charitable contributions you make, and help to make a real difference. For the little bit of extra effort involved in filling out a few forms, you can double the impact of your contribution and cause.

So just when you thought you couldn't afford to give any money away, I urge you to reconsider. You may find that you'll receive way more than you ever give.

This article is from Nora Dunn of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

donating

Can I Write It Off as Charity?

1. Charity Balls and Fundraiser Buys

2. Raffle Tickets

3. Race or Walk Donations

4. Promised Donations or Pledges

5. Political Donations

6. Donated Time or Blood

7. Donated Frequent Flyer Miles

8. Donated Clothing or Household Items

Make Sure Your Charities Are Truly Charities

8 Charities You Can Trust With Your Holiday Donations

For Animal Lovers

1. World Wildlife Fund

2. Petsmart Charities

For Environment Protectors

3. Amazon Conservation Association

For Helping People in Need

4. Direct Relief

5. Compassion International

For Health Advancement

6. Michael J. Fox Foundation for Parkinson's Research

For Veteran Support

7. Homes for Our Troops

8. Operation Homefront

How to Avoid a Charity Scam

How to Spot a Charity Scam From a Mile Away

Make Sure the Name Is Right

Avoid Callers

Know Where the Money Goes

Don't Donate Cash or Give Through Wire Transfers

Be on Alert

Do Some Research

13 Money Goals You Can Still Reach by 2017

1. Increase Your Emergency Fund

2. Start Planning for Retirement

3. Increase Retirement Contributions

4. Reduce Expenses

5. Create a Second Income Stream

6. Give Up a Costly Habit

7. Simplify Your Life

8. Give to Charity

9. Purchase Life Insurance

10. Budget Your Money

11. Say No to Credit Card Debt

12. Automate Your Finances

13. Check Your Credit Report

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Make Money and Declutter by Selling These 5 Unlikely Treasures

1. Coffee Mugs

2. Name Brand Clothing

3. Baby Gear and Clothing

4. Past Amazon Purchases

5. Old Smartphones

What You Can Buy With $5,000

1. Pay Off Credit Card Debt

2. Get a Cat

3. Start a Business

4. Take Your Inner Geek on a Vacation of a Lifetime

5. Bank It

4. Give It to an Old Person: Future You

5. Indulge Yourself for a Year

6. Donate to Charity

9. Eat a Burger

10. Grill Your Own Burgers In an Outdoor Kitchen

11. Skip Waiting in Lines for a Year

Winter Is Coming: Make These 6 Money Moves Now

1. Health Insurance Open Enrollment

2. End of Year IRA Contributions

3. It's Bonus Time

4. Create a Money Filing System

5. Entrepreneur Taxes

6. Donate

Best Money Tips: Contributing to Charities Without Donating Money

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