There are a number of paths you can take to accept charitable donations to help you defray medical costs. Ideally, you will provide a way for your donors to get a tax deduction they can use to compensate for their generosity. Consult with a tax attorney if you have any doubts about the avenues you choose to accept donations.
Step 1
Make arrangements with a nonprofit charity that serves families in need or people with your medical condition to receive the payments on your behalf. A charity can accept payments in your name and give donors a tax deduction only when the organization provides services that are similar to your own needs, according to attorneys at Berry Moorman, a firm based in Detroit.
Step 2
Ask your donors to write checks directly to your doctor or medical facility. There is no limit to the amount or number of donations a benefactor can make when the money is paid to a professional medical provider and not given to you first, according to the Internal Revenue Service.
Step 3
Provide your account number at the medical facility to donors so that your patrons can direct the funds to the proper account.
Step 4
Set up an account at a local bank to accept donations for your medical expenses. Talk to your local banker about providing a no-fee checking or savings account for the direct purpose of collecting donations. According to Bankers Online, banks prefer to provide this service to known account holders who have a relationship with the bank.
Step 5
Provide a list of people who have access to the account along with their contact information and Social Security numbers to the bank. Also give to the bank staff a detailed summary of the purposes of the account as well as contingency plans for the money if your needs change.
References
Tips
- Ask donors to send money directly to you or your representative to be deposited in the designated bank account. Banks often don’t like to get involved accepting money directly from donors because then they accept responsibility for its use.
- Gift tax limits change from year to year, so you should check with the IRS to find out what the maximum is before beginning your campaign to collect money. As of 2012, for example, you can accept donations up to $13,000 from a single donor without incurring a tax burden on the funds for either you or the donor.
Warnings
- When you go through a charitable organization to receive your funds, the organization must be able to reserve the right to use the funds as necessary even if they are designated for you. It is a formality that may not affect you, but to keep the donation legally qualified for a tax deduction, your agreement must state that the organization can defer the money for other purposes.
Writer Bio
Linda Ray is an award-winning journalist with more than 20 years reporting experience. She's covered business for newspapers and magazines, including the "Greenville News," "Success Magazine" and "American City Business Journals." Ray holds a journalism degree and teaches writing, career development and an FDIC course called "Money Smart."