© International Foundation for World Freedom
Dr. Fan Yang, PhD Economics, MS Mathematics
December 17, 2024
Did you know that donating to charity can help reduce your tax bill? Supporting causes you care about not only makes a difference in your community but can also provide valuable tax benefits. If you itemize your deductions, charitable contributions can lower your taxable income, potentially saving you money at tax time. Here’s what you need to know to take full advantage.
Understanding Tax Deductible Donations
The Internal Revenue Service (IRS) allows taxpayers to deduct donations made to eligible nonprofit organizations (like IFWF). Donations can be made in various forms, including cash, goods, or even stocks and securities.
Documenting Your Contributions
Accurate records are essential for claiming deductions. For cash donations under $250, a canceled check, bank statement, or receipt from the organization is usually sufficient. For larger contributions, you’ll need a written acknowledgment from the charity, confirming the amount and that you didn’t receive anything in return for your gift.
Timing Your Donations
To count toward the current tax year, donations must be made by December 31. If you’re planning to give, year-end contributions can help you reduce your taxable income just in time for tax season.
How Much Can You Deduct?
There are limits to how much you can deduct:
· Cash Donations: You can deduct up to 60% of your adjusted gross income (AGI).
· Non-Cash Donations: For items or assets like stocks, the limit is usually 30%-50% of your AGI, depending on the organization.
By giving generously and keeping accurate records, you can make a positive impact on the world while lowering your tax bill. It’s a win-win situation that benefits both you and the organizations you support.
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