Making charitable contributions is a great way to help people in need while maximizing tax benefits, creating a win-win. Contributions made to qualified 501(c)(3) organizations can shrink taxable income, saving hard-earned cash.
Here are four tips to consider when selecting a charity, donating and claiming contributions:
Choose impact.CharityNavigator.org determines which organizations direct the majority of their donations toward programs, and not salaries.
Confirm donations are tax deductible. Visit the IRS website for Tax Exempt Organizations to choose a qualified charity. Be aware of maximum amounts allowed to be deducted from your adjusted gross income. If they do exceed it, defer them to subsequent tax years.
Offer charities more than cash. Donating items and time instead of cash still allows you to reduce your taxable income by claiming property donations, travel expenses and other costs.
Get receipts. The IRS requires a receipt for any donations made over $250, store these tax documents.
We’d be happy to talk with you in more detail about your donation amounts and the timing of them to make sure they have the most beneficial impact on your taxes.
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All the best,
Are you getting the most out of giving?
December 18, 2020