Charitable giving is a very good 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 organization, you need to make sure that it is a qualified organization so that the amount you give will be tax deductible which will help you lower your income tax obligation to the IRS. By lowering your taxable income, you will pay less taxes and therefore save more money. The more taxes you can save, the more money you will have to put in your savings account to use for any other purposes.
The 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 cautious when you decide to make a donation so you might be able to avoid scam artists who may try to benefit by taking advantage of your generosity. You should be aware of non profit organizations that spring up overnight in connection with current events or natural disasters. They may make a compelling case for your money, but as a practical matter, they probably do not have the infrastructure to get the donations to the affected areas or people. Therefore, before you give away your hard earned money, you should ensure that the non profit organization you are helping financially is legitimate.
When you make a donation of any size, you should try to claim the appropriate tax benefits. The tax benefit for charitable donations is available for taxpayers who itemize deductions on their tax returns. The IRS reveals that about one-third of all filers itemize. Taxpayers who take a standard deduction will not be able to claim the tax deductions associated with charitable contributions. The IRS reminds taxpayers to keep appropriate records to substantiate the value of their gifts. For example, for any single gift of $250 or more, a taxpayer must have a written acknowledgment from the non-profit organization 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 have a qualified written appraisal. For more information on how to claim tax deductions properly, you can refer to the charitable giving answer book.