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.
When you file taxes, you have the chance to put down the amount that you donated to the 501 (c) (3) licensed group. Depending on your filing status and other factors, you might need to provide proof the actual receipt from the charity. The receipt will tell the IRS how much you gave, on what date, and the name of the charity that received your contribution.
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.
To bypass this research, many people simply choose to donate to their churches or religious houses. The government allows most religious organizations tax-free charitable status. You could give money and legitimately claim the exemption when you prepare your returns next year. The IRS will accept that donation as long as it meets or exceeds the monetary limit.
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.
When you file taxes, you have the chance to put down the amount that you donated to the 501 (c) (3) licensed group. Depending on your filing status and other factors, you might need to provide proof the actual receipt from the charity. The receipt will tell the IRS how much you gave, on what date, and the name of the charity that received your contribution.
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.
To bypass this research, many people simply choose to donate to their churches or religious houses. The government allows most religious organizations tax-free charitable status. You could give money and legitimately claim the exemption when you prepare your returns next year. The IRS will accept that donation as long as it meets or exceeds the monetary limit.
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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