It’s no secret that donating to charity makes us feel good, especially if you have something that you’re ready to move on from. There are also some significant benefits to having tax deductible donations under your belt in a given tax year. By playing your cards right, you can maximize the tax benefits on your contributions to charity. Whether you’re seeking to donate your car, clothes, or even groceries to a 501(c)(3), C&D is here to help.
Not only can you benefit from your donation to a qualified organization, but we’ll tell you why you should feel good about it, too. Save More Money with Tax Deductible Donations
When Donating, Itemize Your Return
Every tax season, Americans see how the federal income tax depletes a significant amount of their yearly salary. So, if you want to claim a donation that reduces how much you owe in taxes, you’re going to have to itemize your deductions on Form 8283. This means you’ll have to list each deduction you qualify for if you want to be eligible for reaping the benefits.
C&D will help you look over your finances and determine what tax bracket you fall under. Depending on what bracket you’re in, your taxes are reduced by a certain percentage of your donation. For instance, if you’re in the 25% tax bracket, your $1,000 donation will save you $250 in taxes.
Find a Qualifying Charity
The Internal Revenue Service (IRS) only recognizes charities that qualify as a 501(c)(3) or religious organization. Fortunately, the IRS saves you time determining who qualifies with the exempt organization’s search tool. This makes it easier for you to donate to a worthy cause.
Determine a Fair Market Value of Your Donation
People who donate groceries, clothes to Goodwill or the Salvation Army, and anything of monetary value should determine the fair market value of their donation and have those details ready for Form 8283. If you don’t fill out Form 8283, you may fail to be eligible for tax deductions.
If your donation is worth more than $5,000, you should obtain a written appraisal along with having photos and receipts that prove your tax deductible donation is legit. Remember, the IRS is a government organization and they’re very thorough with their process.
How Tax Deductible Donations Make You Feel Good
There are a lot of benefits to altruism. If it saves you money on taxes as well, then it’s a win/win for everyone.
Some other benefits you’ll also experience from making tax deductible donations include:
- Helping someone in need
- Donating to charity makes you feel better
- Support your local community
Still Need Advice?
We’re all about exploring how C&D can save you money on taxes. What’s better than supporting your community and saving money? If you still need help determining if filing a tax deductible donation is right for you, contact C&D. We’ll evaluate what you’re able to give back to your community while saving you some money on taxes in the long run.