As the end of the year approaches, many people and business owners start to prepare for next year's tax season. They realize that they might owe a sizable debt to the government. They want to come up with ways to save money and claim deductions on their returns. Many decide that it would be a good idea to donate to some of the public charities in their areas. You can use this tactic and get a legal deduction for your taxes by learning how to identify legitimate charitable organizations.
These organizations are permitted to extend this opportunity to you thanks to their 501 (c) (3) licensing. This license comes directly from the federal government and establishes the group as one that is tax-exempt and non-profit. It also means that anyone who donates to it gets a receipt that will allow them to claim some or all of the amount when they file their tax returns. This exemption is taken off your tax debt or refunded in cash.
Before you give any cash, write a check, make a donation with a credit card, or sign over possession of assets to it, you are reminded to ask about the organization's 501 (c) (3) status. If the person in charge refuses to disclose this information or says that it does not have it, you can donate. However, you will not get the deduction to claim on your taxes.
If it does have the licensing, it can give you a receipt of your donation, which you can then use to claim the deduction on the return. The receipt will tell you how much you donated, what the value of the asset was, on what date you made the contribution, and to what organization it was made. The IRS might ask that you turn in this document with the return.
Many of these organizations especially the ones that are in most need of funds will make it a priority to get involved with the community. The leaders know that this exposure will bring attention to their cause and entice people to give cash and other contributions. The ones that shy away from the center of attention risk not getting donations at all.
When you want to take the most straightforward path to getting the deduction, you have the option of donating to your church. Most churches are non-profit and have this license from the IRS. Your weekly or monthly tithes count toward the deduction on your taxes. Most churches mail out proof of the donations toward the end of the year and in time for tax season.
To claim an exemption, it typically has to be $500 or more per year. Donations under that amount are not generally eligible to claim on taxes. Your gift is appreciated but not enough to lower your tax burden.
If you anticipate a costly tax bill, you may find that now is the time to start using opportunities to lower that amount. You could get full or partial credit for every dollar you give to charities that serve the public in your area. These organizations have to be licensed as non-profit and likewise are obligated to give receipts you can then use to get credit on your returns.
These organizations are permitted to extend this opportunity to you thanks to their 501 (c) (3) licensing. This license comes directly from the federal government and establishes the group as one that is tax-exempt and non-profit. It also means that anyone who donates to it gets a receipt that will allow them to claim some or all of the amount when they file their tax returns. This exemption is taken off your tax debt or refunded in cash.
Before you give any cash, write a check, make a donation with a credit card, or sign over possession of assets to it, you are reminded to ask about the organization's 501 (c) (3) status. If the person in charge refuses to disclose this information or says that it does not have it, you can donate. However, you will not get the deduction to claim on your taxes.
If it does have the licensing, it can give you a receipt of your donation, which you can then use to claim the deduction on the return. The receipt will tell you how much you donated, what the value of the asset was, on what date you made the contribution, and to what organization it was made. The IRS might ask that you turn in this document with the return.
Many of these organizations especially the ones that are in most need of funds will make it a priority to get involved with the community. The leaders know that this exposure will bring attention to their cause and entice people to give cash and other contributions. The ones that shy away from the center of attention risk not getting donations at all.
When you want to take the most straightforward path to getting the deduction, you have the option of donating to your church. Most churches are non-profit and have this license from the IRS. Your weekly or monthly tithes count toward the deduction on your taxes. Most churches mail out proof of the donations toward the end of the year and in time for tax season.
To claim an exemption, it typically has to be $500 or more per year. Donations under that amount are not generally eligible to claim on taxes. Your gift is appreciated but not enough to lower your tax burden.
If you anticipate a costly tax bill, you may find that now is the time to start using opportunities to lower that amount. You could get full or partial credit for every dollar you give to charities that serve the public in your area. These organizations have to be licensed as non-profit and likewise are obligated to give receipts you can then use to get credit on your returns.
About the Author:
Find a summary of the reasons why you should support public charities and more info about great charity organizations at http://www.tableofplentyhmb.org/board-of-directors right now.
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