Giving to charity can benefit both donors and recipients not only by helping a worthy cause but also by reducing the donor’s tax return. Here are a few rules on how to make a tax deductible donation the next time you’re giving to charity.
What can I deduct when giving to charity?
You can deduct anywhere from 20-50% of your adjusted gross income on your tax return, depending on what organizations you donate to. Certain private foundations or organizations will have a lower limit. This deduction limit counts for every donation you make per year. If you contribute more than the 50% limit, it can be applied to a return in the future through a process called carryover.
How can I claim tax-deductible donations?
To claim your tax-deductible donations, you’ll fill out the Schedule A on your return. This is where all itemized deductions are listed, including charitable contributions. Itemizing can be a time-consuming process, but it’ll go by quicker if you keep receipts of all of your contributions.
Things to Keep in Mind When Giving to Charity
There are a few things to remember about tax-deductible donations to maximize your return.
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Check the organization’s status:
Donations will only count on your tax return if they’re made to a tax-exempt organization. Check to make sure the organization is a certified 501(c)(3) group as defined by the Internal Revenue Code.
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Keep track of your contributions:
Make sure you write down all your donations, no matter how large or small. These include bank statements, receipts, or W-2 forms if you automatically donate from your paycheck. If you donate cash or property worth more than $250, the IRS requires a written letter of acknowledgment. If you deduct at least $500 worth of noncash contributions, fill out Form 8283.
Make Your Tax-deductible Donations with The Mustard Seed
If you’re looking for a place to make a difference, consider The Mustard Seed Furniture and Clothing Bank. Our mission is to rebuild the lives of families and individuals who have suffered disaster or personal tragedy by providing household furnishings and clothing while being environmentally responsible to our community. We believe in integrity, respect, commitment, compassion and service while giving back to the local Orlando community. To donate your funds, furniture, or time, call us at 407-875-2040.