Get Tax Deductions for Charitable Donations
It may seem like an oxymoron, giving to charitable organizations only to acquire a receipt. The concept of giving has the idea of offering things freely without accepting anything in return, whether it’s cash, clothes, or other possessions. We’re taught to give, give, give and not expect anything back. While that might make you feel all warm and fuzzy inside, there is the matter of considering the Internal Revenue Service (IRS) that also, has arguably made people feel anything other than warm and fuzzy!
What’s Waiting for You in 2017
With the holiday season approaching, it’s probably in everyone’s best interest to be reminded that after all of the festivities end, a W2 will be waiting for you to process and send to the IRS. It’s usually at that time, one might begin thinking about all of the things they gave away—things they could have written off as a charitable contribution on their taxes. Forget about the warm and fuzzy feeling. At that particular time, the focus is usually about ‘How can I reduce the amount I owe?’ or ‘How can I increase my refund?’
The answer remains the same: By taking advantage of the tax deductions that are allotted to you.
No Reason to Feel Guilty
It’s sad to say that many taxpayers don’t take advantage of writing their donations off. Whether it’s because of guilt or they just didn’t bother acquiring a receipt, if they don’t have any documentation to support giving to a charitable organization, then the money is simply gone. Before you settle your conscience to being OK with that, this is what you need to consider: All of those non-profit organizations are required by law to report what they’ve received to the IRS. They’re reporting it, so why shouldn’t you?
What Business Qualifies as a Charitable Organization?
There might be some people who may not even know what a charitable organization is. A charitable organization is a group that does not work for a profit. Any money or items they receive are dedicated to furthering a cause or social issue. Here are some examples of charitable organizations:
- Homeless Shelters
- Pet Shelters
- Food Banks
Other charitable contributions can be seen on television where they’re soliciting you for donations. You may also be familiar with The Wounded Warrior Project, Ronald McDonald Hospital, American Heart Association, American Diabetes Association, and more. There are also the retail charitable organizations like Goodwill and the Salvation Army.
Charitable organizations can have a paid staff as long as the money that they’re putting back into their business is going toward the overall cause.
How to Get a Tax Exemption for What You Give
The way this works is simple. All you have to do is get a receipt for everything you have given away. If it’s money, then you get a receipt for the exact dollar amount. If it’s a used item like clothes, furniture, or a vehicle then it is up to you to give an honest dollar amount that’s not over or under exaggerated. However, you’re better off under estimating the dollar amount as anything extreme will cause a red flag and give the IRS a reason to audit you.