03/21/2023: Maximize Your Tax Deductions

Donating to charitable organizations is a great way to give back to your community and support causes that are important to you. Not only does it feel good to help others, but it can also have some nice tax benefits. Here are some tips on how to maximize your tax deductions when making charitable donations.

First, it’s important to know that in order to claim a tax deduction for your charitable donations, you must itemize your deductions on your tax return. This means you can’t take the standard deduction and also claim deductions for your charitable donations. If you’re not sure whether you should itemize or take the standard deduction, consider using tax software or consulting with a tax professional to help you make the decision.

Next, make sure the organization you’re donating to is a qualified charitable organization. In order to be eligible for tax deductions, your donations must be made to organizations that are recognized by the IRS as tax-exempt. This includes most religious, educational, and charitable organizations. To check the IRS website to see if an organization is qualified, click here: https://www.irs.gov/charities-non-profits/tax-exempt-organization-search.

Once you’ve confirmed that the organization is qualified, keep track of your donations. This means keeping receipts, or other records of your donations. This will be important when it comes time to claim your deductions on your tax return. If you’ve made a donation from funds in your bank account, you can quickly locate transaction documents within your E-Statements inside Internet Banking.

When it comes to the amount of your deduction, you can generally deduct the fair market value of the property or items you donate. This is the price that the property would sell for on the open market. If you’re not sure what the fair market value is, just run a quick search online for a donation value guide.

In some cases, you may be able to claim a higher deduction for certain types of donations. For example, if you donate appreciated stocks or other capital assets, you may be able to claim a deduction for the full market value of the assets, rather than just what you paid for them. Consult with a tax professional or refer to IRS publications to learn more about these types of deductions.

Finally, make sure you claim your deductions in the right year. Generally, you can only claim deductions for donations made during the tax year. So, if you donate in December, you can claim it on your tax return for that year, even if you don’t file your return until the following year.

Charitable donations can provide some nice tax benefits, but it’s important to do it the right way to maximize your deductions. Make sure the organization is qualified, keep track of your donations, and claim your deductions in the right year. By following these tips, you can give back to your community and save some money on your taxes at the same time.

03/21/2023: Maximize Your Tax Deductions

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