Tax | Charity Case

Donations: Everyone Wins

July 18, 2011 By admin Leave a Comment

Image by miamism via Flickr

While donating to a charity is in itself a feel good act, the reality is charitable donations are positive for several reasons. Taking the time to understand how making a charitable donation can impact the charity, impact your bottom line, and make you feel good, will help you understand just how important it is to make charitable donations.

First, recognize that, especially during these tough economic times, charities are in need of help. Whether you choose a charity that supports homeless or otherwise needy people or one designed to give funding to medical research, charities are in need of funding more than ever before. You may be surprised to see just what impact even a small cash donation can have.

Second, remember that it isn’t just the charity that benefits from the donation. Instead, you got a big benefit at tax time. While there are a variety of rules impacting charitable donations and tax breaks, the reality is you will be eligible for at least some sort of tax deduction when you make a contribution. Talk to your accountant or tax professional to see what documentation you will need to keep.

Finally, making a charitable donation just feels good. Know that you are helping someone in need is a great way to generate positive energy in your life.

If you have some extra cash or some gently used household items or clothing, consider making a donation. You will help out some people in need, give yourself a tax break, and make yourself feel great!

Filed Under: Charity, Donation Tagged With: Charitable organization, Donation, Tax

Help Others and Save on Your Taxes at the Same Time

June 29, 2011 By admin Leave a Comment

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Image by miamism via Flickr

Donating to charities can be one of the most rewarding things that you can do, but most people do not know that it can help you in return. Many times, you can actually save money when you give to others.

When you donate money, food, clothing, toys or other items to a charity, always make sure that you ask for a sheet showing that you did so. This can be used as evidence to get deductions for charitable donations on your taxes. Keep them in a journal or expense record noting the date, items and the estimated value of what you donated. These can quickly add to tax savings at the end of the year.

These records can also be easily gotten when you donate online or through your cell phone. If you text a donation or pay through an online site, you can easily print off a record of the transaction. Your phone bill will have the details of a donation as well. Keep track of these throughout the year and you will be amazed at what you can save at tax time.

You should ask your accountant or tax preparer what items are eligible for deductions, what records you should keep and any limitations that there are. This will help you to keep better track of what you are donating and what you can count as deductions. These regulations can change each year, so be sure to ask your preparer for information on the most current limitations and restrictions.

Filed Under: Charity, Donation Tagged With: Charitable organization, Donation, Tax

The Tax Benefits of Giving

December 12, 2010 By admin Leave a Comment

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Giving is a wonderful chance to give back to the world. It’s a time to show those less fortunate that there is someone out there who is thinking of them and is willing to do what it takes to pick them up off the ground. There are few things a person can do that are more rewarding and fulfilling then donate their time and money to charity.

While the government is fully aware that it is an act done out of the kindness of their own heart, the government also knows that it’s a good opportunity to reward these thoughtful people will a break in their taxes. If you re someone who is currently giving to a charity then this a great reason why you should up the ante a little more and catch yourself a tax break.

A tax break is when the government deducts money from your taxable income. Let’s say a man makes 30,000 dollars a year with no pre tax money coming out of his check. This would make the full amount of his salary(30,000) taxable to the government. However, if this man gives 5,000 a year to charitable causes then it reduces the amount that the government can tax him on to 25,000. This makes the amount of the money the government can tax him on less.

This is a benefit for anyone who is looking to save a little money to Uncle Sam. The only way to do this successfully is to get a receipt for everything that is donate. If you donate clothes then get a slip stating the amount you donated. This will give you a free and clear path to taking that from your taxable income. If you give money to church then do so in the form of a check so the money you give can be documented. These deductions will allow you to feel good about yourself and will allow you a chance to save money.

Filed Under: Charity Tagged With: Tax, Tax break, Taxable income

Tax Deductions To Charity

December 10, 2010 By admin Leave a Comment

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When people decide to give to a good cause they are often looking at that decision for it’s tax benefits. There are a lot of ways that the government will support those who support those in need. They give a lot of compensation to the good doers, but that isn’t to say that those good deeds and appreciation from the government don’t come without any rules or restrictions. As a matter of fact the government is willing to help, but they have to make sure people are respectful of the integrity of their gift.

When an individual gives to a charity there are a number of rules they have to follow if they want compensation for their good deeds. For instance a person who volunteers in the mornings at a soup kitchen might be inclined to deduct money from their federal income tax for the time they spent in the charitable service of others. They might determine since they are a lawyer and have a set hourly fee that they can deduct that over the hours they work. This isn’t the case. An individual cannot take a tax deduction on the time they spent in service. This would frankly open up the government to a world of inappropriate tax practices.

A person willing to make a charitable contribution to a person is not something that they can tax deduct. Even if the friend is collecting as a part of a larger donation to a charity, it can not be tax deducted. This means that for individuals looking to get a break on the money they gave they are best off going through the charities directly. This should keep everyone in a position to save the most out of their taxable donations.

It feels good to give back, but it feels better when it can be taxed properly. These tips should help the charitable feel more aware of the pitfalls.

Filed Under: Charity Tagged With: Charitable organization, Internal Revenue Service, Tax

The Rules of Charitable Tax Breaks

December 8, 2010 By admin Leave a Comment

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Being charitable is a valued part of life. There is an immense sense of pride that one person feels from giving back to their community or country. In the United States they are often greeted with a very generous offer: taxation benefits for those who decide to give. These benefits can reduce a person’s taxable income and that could lead to a variety of benefits in the money a person saves and what they can do with that savings. While it’s never the intention of someone to give in order to receive a benefit, but it is important for those that wish to take advantage of the benefits to know the various rules that apply. Here are a few of those rules.

Many charities will often attempt to raise money through raffles and carnival games. Their feeling is that a game of chance is a great way to gain people’s interest and keep them playing. This is a fun way to accept donations for a good cause. The down side to this is that those playing the games cannot claim the money on their income tax. The reason for this rule is two fold. The first reason is that these games are usually not accompanied by a receipt. This means that there is no accuracy in reporting just how much was spent. It would be easy for someone to claim they spent $100 on raffle tickets even though they may not have. The other reason is that these are games of chance. They are not clear cut money that goes to the charity, plus they are not clear cut money that a person will lose. That is why when a charity raises money in the case of a poker tournament they have a set charitable amount and there might be a way to recoup the entry fee. But the winnings and losses at the table is a completely separate, and not tax friendly.

Filed Under: Charity Tagged With: Tax, United States

Tax Breaks on Concerts

December 5, 2010 By admin Leave a Comment

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Getting tax breaks from the government for contributions made to charities is one of the nice perks to living in America. The government recognizes the generosity of the tax payers and, in turn, the tax payers get to save money on their taxable income. It’s increasingly nice because the more money they give, the less money they have to pay in taxes at the end of the year.

While many people feel encouraged to give more because of this generous gift, there are some rules and regulations that the government must enact in order to keep it fair to themselves, and to others. They cannot have the someone claiming more than half of their money on charitable contributions just to avoid taxation. Everyone needs proof and needs to adhere to some of the laws made.

The first interesting thing that the Internal Revenue Service has done is create rules to entertainment functions for charity. Let’s say the city in which you live in, is getting together a collection of bands to perform at the local stadium for an event to help endangered youth. You might go to this event and have to pay the adjusted ticket price of 500 dollars. It’s an auction price for the seats and so you of course over payed.

The idea for many is that when tax season comes around they will be able to write off the full 500 dollars of the ticket price as a way to reduce their taxable income. However, when it comes to a stadium ticket or to see a movie or play, a person can only write off over the fair value for the ticket. So assuming you see the value of a festival ticket at 100 dollars, then you could write off the remaining money. Charity doesn’t mean that you get to go to a show for free. It means that you can write off what you overpaid for.

Filed Under: Charity, Society Tagged With: Internal Revenue Service, Tax, Taxable income