Charitable donations are an opportunity to decrease yearly tax burden and not a thing like feeling generous. Can you imagine the statistics given below –
- In 2014, Americans donated $358.38 billion that is direct increase of 7.1% from 2013. It is equal to 2% of the US GDP.
- Around $258.51 billion comes from people, who represent 72% of total charitable donors.
However to make your charitable donations count, it is crucial to adhere the relevant tax rules.
Tips to make charitable donation count for tax deduction
- On Schedule A forms itemize deductions using lines from 16 to 19
- Donations to approved charitable organizations are eligible for tax deductions.
- Check for IRS letter to confirm their exempt status
- Churches, temples, synagogues, and mosques are regarded as de facto charitable sources, even if you don’t see them on the list.
Donations to individual is not applicable
- Even if the individual deserves, you cannot deduct such giving [to homeless, tough times in neighborhood like illness or accident or fire].
- You can take support from an established organization to help the specific individuals in case tax deduction is crucial.
- Writing proof is necessary, even for cash deductions
- The writing will include credit card receipt or canceled check that clearly shows the charitable organizations name, date, and amount.
- It is vital for audit’s
Don’t avoid payroll deductions
- If contribution is made through payroll deduction then according to Pension Protection Act, it is mandatory to keep record.
- W2 form or other paperwork furnished by employer will show the actual amount withheld against charitable donation with pledge card displaying organizations name.
Tax payers need to consider their donation limits, which truly apply. Therefore remember to do your homework and get qualified for tax deductible donation, this year.