Charitable Donations Tax Deductions

2008-12-15 15:02:10

( Charity )



Benefits of Donating to Charities

There are several reasons why you may want to make charitable donations. You have extra assets that you don't really need. Instead of just keeping idle or unwanted assets at home or waiting for the next chance to have a garage sale, you can just donate them to the less fortunate who may have better use for them.

Donating to charities gives you a great feeling of being able to do a good deed for someone else. Or you may be supporting a cause that needed funding, such as ecology, education of poor communities, or human rights issues.

Tax Advantages of Charity Donations

Another good reason for making charitable donations in cash and kind is that you can actually get deductions for your income taxes. According to the IRS, you may enjoy tax deductions for donations you make to some qualified institutions or causes.

Actually, you can deduct cash donations in full up to fifty percent of your adjusted gross income, or property donations up to thirty percent. You can also deduct up to twenty percent of capital gains contributions which have appreciated.

In case you exceed the limits stated by the IRS, you can carry over the excess contribution amounts to the next fiscal year, up to a maximum of five years.

What are Not Considered Charitable Donations Tax Deductibles

You may not deduct donations to political parties, individuals, foreign governments, labor unions, chambers of commerce, or for-profit organizations. Y

Moreover, the charity donations must be tangible. That is, they must be either cash or physical assets. Therefore, the time you contribute as when you volunteer to serve in a charitable cause is not qualified as a charitable donation tax deductible.

Other Conditions for Charitable Donations Tax Deductions

Donations in kind must be strictly valuated and substantiated. In other words, the amount of donation must be based on the fair market value of the asset involved.

One of the required documentation for charitable donations in kind is the receipt that is given back to you. For charitable car donations, your recipient needs to acknowledge your donation in written form.

You need to file a claim for a charitable donation tax deduction by filling out a special schedule, which you need to attach to your income tax return. The same thing goes for cash donations.

To learn more about charitable donation tax deductions, you need to write the IRS or read about the provisions in annual income tax manuals that the IRS releases during the first quarter of the calendar year. You can also look up online sites to secure more information and tips on how to successfully file and claim charitable donations tax deductions.


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