Maximizing Tax Deduction Donations
A few tips to help with your tax bill
Giving to charity can be life-affirming—and as a bonus, it can help with your tax bill. If donating to a charity is part of your tax plan, here are a couple of tips so you can maximize your tax-deductible donation before year-end.
What Is A Tax-Deductible Donation?
A tax-deductible donation allows you to deduct cash or property you transfer to a qualified organization, such as clothing or household items. A qualified organization includes nonprofit religious, charity or educational groups.
You can check whether the organization is tax-exempt by searching the IRS Tax Exempt Organization Search Tool. You’ll need the complete name of the entity or its employer identification number (EIN).
NewPath Child & Family Solutions is a nonprofit 501(c)(3) organization.
Tax ID #: 84-2733413
Generally, the amount you can deduct on your taxes is the fair market value of the property you donate, or the cash value. However, in some cases, the IRS may limit the amount you can claim on your taxes.
You can generally claim charitable contributions if they’re less than 60% of your adjusted gross income. You can find your AGI on line 11 of Form 1040. Depending on the type of property and the organization, the IRS may even reduce your contributions up to 50%, 30%, or 20%. If you’re not sure about your contribution amount, you should consult a tax professional.
How To Maximize Your Tax Deductible Donation
If you’re considering donating to your favorite charity this year (by 12/31), here are a few ways you can maximize your tax deductible donation.
You Need To Itemize To Deduct Charitable Donations
Generally, you can claim a charitable donation on your taxes only if you itemize your deductions.
If your itemized deductions are greater than the standard deduction for your filing status, you should elect to itemize to reduce your taxes.
For the 2022 tax year (meaning the taxes you’ll file in 2023), the standard deduction amounts are:
- $12,950 for single and married filing separate taxpayers
- $19,400 for head of household taxpayers
- $25,900 for married filing jointly or qualifying widow(er) taxpayers
Before filing your return, you should get an acknowledgment letter from the charity, containing the organization’s name, amount and contribution date, and keep a canceled check or credit card receipt for your records.
Organizations like NewPath Child & Family Solutions will mail an acknowledgement letter dated on the day you make a donation. If you need one sooner, it can be emailed. To receive yours by email send requests to: development@newpath.org.
What do you need to write off a donation?
To prove how much you contributed, you will need to keep records. The type of record you keep depends upon the donation.
For a tax write-off, you will need to keep a bank record for cash donations. For example, you should keep a copy of a canceled check, bank or credit card statement or receipt. Your receipt should provide the name of the qualified organization, the date and contribution amount.
You may need to keep other records depending on how much you donate if you make a noncash donation. Generally, your record should include the date of your contribution, the name of the qualified organization and amount. You should also request a written statement from the organization to write off your donation.
But keep in mind that for noncash contributions of more than $500 you may need to keep additional records. It’s a good idea to speak with a tax professional before making a contribution to determine which records you’re required to keep.
Please consult with your tax advisor, investment advisor, or CPA to determine if your gift will be considered a taxable event.
SOURCE: FORBES
Maximize Your Tax Deductions Before December 31st
As we quickly approach the end of 2022 this Saturday, December 31st, we encourage you give to your favorite nonprofit. Invest in a child’s future.
Get In Touch
For additional questions or information, email NewPath’s Development Team at development@newpath.org.
Invest in a Child’s Future!
We are grateful for all kindness and support community members like you have given us through the years. Your continued support makes life-altering changes and opportunities in our children’s lives that will follow them forever. Without you, we cannot have the great success and community impact we are so proud of.
Donate
We are grateful for all kindness and support community members like you have given us through the years. Your continued support makes life-altering changes and opportunities in our children’s lives that will follow them forever. Without you, we cannot have the great success and community impact we are so proud of.