Amalan-amalan Pembuka Rezeki dari Langit, No 4 Jarang Orang Lakukan
Many of us look for ways and means to reduce our taxes. You might invest in life insurances, personal loans, and various other mediums, but have you ever given a though about charity?
Yes, there are many charity programs that offer tax deductions, but it is important for you to know the limits of your contributions.
Contributions that are deductible and non deductible
As per the IRS standards, organisations that operate under 501(c) (3) are liable for tax deduction for charitable purposes. This could include child care, religious, scientific, literacy, and even amateur athletic organizations.
You might feel happy knowing that if you contribute to any of the organisations mentioned under 501(c) (3), you are eligible for tax deductions. Well, here is the twist. Not all contributions that you make would provide you this benefit.
Below are some options where tax is deductible:
Money contribution in the form of currency, checks, and credit card contributions
Property contribution such as old clothes, furniture, cars, and jewellery
Intangible property such as stocks, bonds, or mutual funds
Deductions with regards to property is to be made on the fair market value
The non deductible options include:
Gifts made to an individual priest, reverend, or person
Lottery tickets, bingo or a raffle draw
Profit oriented schools and hospitals
Sports clubs, labour unions, or civic league
Political groups or candidates
Choosing the Right Charitable Trust for Tax Deductions
Now that you are aware of the tax deductible donations, the next step is to selecting the right charitable trust and avail the benefits from them. If you own a small business, then investing in charity would be a good tax saving option for you.
Firstly, you will need to research about a number of charitable institutions. Be patient and understand what type of charity you wish to make. Look for companies that fall under 501(c) (3). Once you are satisfied with the institution, make your donations with an open heart.
Ensure that you make your donation as per your category limitation. Once you pay the donation in full for the entire year, remember to route it through Form 1040 Schedule A.
Bear in mind to keep the records of all the donations made. Any charitable organisation would give you a receipt for the donation made. This can be later produced at the time of writing off your taxes.
Know your contribution limits
To a certain extent, the limitations put forth by IRS would not affect your taxable deductions. If your contribution is greater than 20% of your gross income, then there might be a limitation. This again might vary, depending on the type of organization you are making the contributions to.
As per IRS standards, in case you have certain contribution limits, then you need to pay if off within five years, provided the excess that you carry forward does not exceed 50% of your gross income.
Conclusion
If you are confused about the rules and regulations imposed by the IRS, then it is always better to hire a good tax adviser and understand what needs to be done. Bear in mind that you will need to share information about your total income, in order to get the right deductions.
Arthritis National Research Foundation is a research organization that is dedicated towards finding treatments for serious health issues. You could also offer tax deductible donation and be an integral part of our cause. Please visit our website for more information.
Article Source: https://EzineArticles.com/expert/Mohammed_Abdul_Nadeem/327218
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