How Donating Can Help You Save Money
Charitable giving is one of the best ways to help non profit organizations and, at the same time, help your finances. A qualified donation is tax deductible. Whenever you give to a non profit organization, you better make sure that it is a qualified organization so that the amount you give will be tax deductible which will help you lower your income tax obligation to the IRS. By lowering your taxable income, you will owe the IRS less and save more money. The more taxes you can save, the more money you will have to put in your savings account to use for anything else you wish.
The problem is that charitable giving is not without risk. Your charitable donations are an investment in your community, the nation, and the world. It is best to be careful when making your donation decisions so you can avoid scam artists who try to profit by taking advantage of your kindness. You need to be aware of non profit organizations that spring up overnight in connection with current events or natural disasters. They often make a compelling case for your money, but as a practical matter, they often don’t have the infrastructure to get the money to the affected areas or people. Therefore, before you make the donation, you should ensure that the non profit organization you are going to support is legitimate.
When you make a donation of any size, you should try to claim the tax benefits. The tax benefit for donations is available for taxpayers who itemize deductions on their tax returns. The IRS says that about one-third of all taxpayers itemize. Those who take a standard deduction receive no additional tax benefit for their donations. The IRS reminds taxpayers to keep appropriate records to substantiate the value of their gifts. For example, for any single gift of $250 or more, a taxpayer must have a written acknowledgment from the non-profit organization by the earlier of the date the person files the tax return or the filing deadline, including extensions. A person donating property valued at more than $5,000 must have a qualified written appraisal. For more information on how to claim tax deductions properly, you can refer to the charitable giving answer book.
