In addition to the overall benefits ofmaking charitable donations, there are a number of tax benefits to be had aswell. In fact, while many people give out of the kindness of their heart, stillothers give for tax benefits as well. Navigating through the tax benefits arefairly simply and in most cases, your accountant or tax preparer can assist youwith figuring out how to take the charitable contribution deduction and whetheror not the charity of your choice is qualified. Here are some additional tipson the tax benefits of making charitable donations:
?????????A donation to charity couldentitle you to take a charitable contribution deduction on your income tax aslong as you itemize deductions:? Whencharitable gifts are deductible, the amount of the donation is actually reducedby your tax savings. For those in a higher income tax bracket, the appeal ofgiving to charity increases as the cost of that contribution is greatlydecreased by their tax savings. For example, people who are in the 33% taxbracket actually only pay $67 for a $100 donation. Therefore, the higher theamount of the contribution, the more you end up saving. Wealthier people cannot only afford to give more, but they also get a larger tax reward for doingso.
?????????The charitable contributiondeduction occurs in the year in which you pay it: When you mail off a check tocharity, it is considered payment. Moreover, making a contribution on a creditcard is deductible in the year that it is actually charged to the card, even ifthe credit card company does not receive the payment until much later in theyear. Be sure to double check this with whatever charitable organization youare working with to see when they process payment so you know exactly when theyplan to charge you credit card or to ensure they have received any kind ofmailed-in payment. This is good information to have for your personal records.
?????????There are a large number ofcharities that qualify for this deduction: While you can only deduct gifts ifthey are made to a qualified charity, many people have no problem with thisbecause the list of qualified charities is extensive. Keep in mind thatcharitable contributions deductions cannot be taken to any charity that doesnot quality --- regardless of whether you think they should be qualified ornot. Additionally, contributing to other foreign governments and politicalorganizations and charities as well as a number of private foundations are noteligible for the charitable contribution deduction.
You can find online non-profit organizations that give away grantsand foundation funding in large numbers. However, care must be taken whilechoosing a company offering charitable donation
, and thorough back-ground checkis to be done to ensure that the company has a sound history of positive andefficient donation and grant funding.
