Get tax deductions after donating to charity

Many of us are looking for ways to lower our taxes. You can invest in personal loans, insurance and other different means, but have you ever thought about charity? Yes, there are several charitable programs that provide tax deductions, but it’s vital that you know the restrictions on your contributions.

Deductible and non-deductible contributions

Under IRS standards, businesses operating under 501(c)(30) are subject to the charitable deduction. This may include literacy, scientific, religious, childcare organizations, and also amateur athletics.

You can feel happy knowing that if you contribute to any of the organizations listed under 501(c)(3), you are eligible for tax-deductible donations. Well, there is a twist. Not all of these contributions offer you this advantage.

Here are some options where the tax is deductible:

• Deductions with respect to the property must be made on the market value
• Intangible property such as mutual funds, bonds, stocks
• Contribution of goods such as jewelry, cars, furniture and old clothes
• Contributions of money such as credit cards, checks and currency

Non-deductible options included:

• Political group of candidates
• Civic league, unions, sports clubs
• For-profit hospitals and schools
• Raffle draw, bingo or lottery tickets
• Gifts given to a person

Selecting the Appropriate Charitable Tax Deductions

Since you now know about tax-deductible donations, the next step is to choose the right charitable trust and take advantage of them. If you have a small business, then cancer charity could be a tax saving option.

First of all, you should research about different types of charities. Be patient and realize the kind of charity you want to do. When you are satisfied with the institution, make your donations the way you want.

Be sure to make your donation according to the category restriction. Once you pay the donation for the entire year, just keep in mind that you have to route it through form 1040 Schedule A.

Keep in mind to keep all records of donations made, for example, to children with cancer. Any type of charity will give you a receipt for the donation made. This may occur later when you pay your taxes.

Know the limits of your contribution

To some extent, the restrictions put in place by the IRS would never affect taxable deductions. If your contribution is more than 20% of gross income, then there may be a restriction. Again, this may vary, depending on the type of organization you are donating to.

According to IRS standards, in case you have specific contribution limits, you must pay them within 5 years, as long as the excess you carry does not exceed 50% of gross income.