When it comes to paying taxes, most individuals and businesses are willing to spend the extra time and effort to find valuable tax deductions that can drastically change how much they owe. There are a number of deductions that may help lower your tax bill. The trick is finding the right deductions and making sure they qualify for your specific situation.
One of the most common is tax deductible charity donations. When made to qualified organizations, charitable deductions can count as a significant deduction when you file your taxes. The deduction itself is usually not the driving reason for the contribution, but it is definitely a bonus.
It is surprising to some people when they make a contribution to a charity and then find out later that it will not count as a deduction towards their taxes. As it turns out, there are some rules that accompany charitable deductions that play a big role on whether it will count or not.
Below, we list 3 charitable donations you can make that will be tax-deductible, as they fall within the guidelines and rules set forth by the IRS.
Many people have donated to and are familiar with public charities such as Goodwill, Red Cross, Boys/Girls Clubs of America, United Way and the Salvation Army. The IRS defines public charities as:
- Hospitals, colleges, universities, and qualified medical research organizations affiliated with hospitals, colleges and universities.
- Having and active fundraising program
- Receive contributions from many sources
- Actively function in a supporting relationship to one or more existing public charities
This would include churches, synagogues, temples and mosques. It is not uncommon for members of religious groups to donate or contribute consistently to their church throughout the year. Some individuals and businesses choose to contribute to these religious organizations as well.
In order to claim charitable donations given to a religious organization, a person or business must receive documentation from the organization showing the amount that was donated. This documentation is then included when filing taxes.
Some people may already have a tie with a certain private foundation that they and their family have an association with for years. These foundations are also an appropriate place for charitable donations that can be counted as a tax deduction. Those who choose to donate to a private foundation are often looking for maximum control over their charitable gifts. Because these donations are typically very large, the receiving institution is usually okay with the donor having a say as to when and how their donation is used.
As you file your taxes for 2014, do you feel that you received adequate tax deductions? Do you think that there may have been more you could have done to receive more deductions? If so, start making your 2015 strategy now! Give us a call and let us give you some ideas on charitable contributions or tax deductible ideas. You can reach us at 602-375-5251.