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Charitable giving is a wonderful way to help non profit organizations and, at the same time, help your finances. A qualified donation is tax deductible. Whenever you donate to a non profit charity, you should make sure that it is a qualified organization so that the amount of your donation will be tax deductible which will help you lower your income tax obligation to the IRS. By lowering your taxable income, you will owe less taxes and therefore save more money. The more taxes you save, the more money you will have to put in your bank account to be used for any other purposes.

A major problem is that charitable giving is not without risk. Your donations are an investment in your community, the nation, and the world. It is important to be careful when you donate so you can avoid scam artists who try to profit by taking advantage of your generosity. You need to be aware of non profit organizations that spring up overnight in connection with current events or natural disasters. They often will make a compelling case for your money, but as a practical matter, they probably don’t have the infrastructure to get the money to the affected areas or people. Therefore, before you give away your money, you need to ensure that the non profit organization you are supporting is legitimate.

When you donate anything, it is beneficial to try to claim the tax benefits. The tax benefit for donations is available for taxpayers who itemize deductions on their tax returns. The IRS says that about one-third of all filers itemize. Those who take a standard deduction receive no added tax benefit for their charitable gifts. The IRS reminds taxpayers to keep appropriate records to prove the value of their gifts. For example, for any single gift of $250 or more, a taxpayer must have a written acknowledgment from the charity by the earlier of the date the person files the tax return or the filing deadline, including extensions. A person donating property valued at more than $5,000 must obtain a qualified written appraisal. For more information on how to take advantage of tax deductions, you can consult the charitable giving answer book.

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