The IRS will accept any extra tax money you are willing to give them, but you can save much of your tax money if you donate to charities. Donations given to churches, other religious institutions, and recognized non-profit organizations, are tax-deductible. But to claim your tax deduction, you need to have written record of the payment made. You can file Form 1040 and choose itemized deductions on Schedule A to include the deduction.
Property: If you plan to donate a property to a charitable organization, you can get a tax exemption on it if the charitable organization is recognized. It is only after you have handed over the legal rights to the property that you can include it in your tax return for a tax deduction.
Donating to Churches or other religious institutions: If you are donating to any religious institution, you do not need to check their 501(c)(3) tax-exempt status because all religious institutions automatically enjoy a tax-exempt status. As for other charitable organizations, you need to verify before claiming a deduction whether the organization has obtained 501(c)(3) tax-exempt status from the IRS or not.
Written Record the IRS Accepts: The IRS accepts documentary proof of the amount paid to a charity if it has the name of the charitable institution, the date on which the contribution was made, and the amount paid to the institution. Whether you pay by check, cash, credit card, debit card or wire-to-wire, do remember to receive a receipt from the organization.
Donation of Over $500 Annually: If you donate more than $500 a year to charity and the donations are not in cash, you will need to attach Form 8283 (Noncash Charitable Contributions) to your tax return. Donations of more than $5,000 need an appraisal by a qualified evaluator.
You can save a lot of your money in taxes through various deductions and lower your tax bill. If you pay to charity frequently, this deduction can save you much on taxes. When you are paying to charity, don’t pay to the IRS.
Labels: IRS, Tax Deductions, Tax Filing, Taxpayers