Choosing to give to charitable causes is an admirable act. Many important initiatives are solely dependent on charitable contributions. And while the greatest benefit of making these contributions is the impact it can make on an issue or cause you care about, it can also have financial benefits.
If you itemize your tax return, donating to charities can potentially help you minimize your tax burden. Your contributions don’t have to be monetary either. Donating items of value, such as cars, equipment, furniture, and clothing can also potentially help reduce your taxes come April.
Say you earn $100,000 this year, and donate $15,000 in value to several charities, including contributions of cash and goods. Your taxable income could reduce from $100,000 to $85,000, bringing you down a tax bracket and lowering the tax rate on your income.
To Benefit, You Must Follow Specific Steps
In order to benefit from these charitable donations, you must follow specific steps, or the IRS may not deem your contributions tax-deductible. In this article, we’ll outline these steps, and help you choose the right charities to contribute to.
Since everyone’s situation is unique, you should always check with your tax advisor prior to making charitable contributions.
Download your copy of 5 Mistakes to Avoid When Giving to Charity so you can get on track to make your giving count.