Making charitable donations is the best way to get qualified for a tax exemption in the USA. Our generous contributions to a charity bring about mutual benefits both for the donor and its recipients. Apart from making a donation to any organization, there are numerous other ways to claim your tax discount on the sincere contribution you make in other significant fields in the USA.
Here are some helpful tips to get the maximum tax discount on donations in the USA.
The expenses you spend out of your own pocket for a charitable purpose will also qualify for tax deductions. If you make hamburgers for a charity fundraiser you will be able to deduct the cost of the ingredients you needed to make them. Such charitable gifts can help you to save the receipts or itemize the costs in case the IRS conducts an audit.
Tax Deductions for Teachers:
Teachers need materials to demonstrate lessons to their students making the learning process much effective. Teachers at times go beyond their limitations and spend out of their own pocket to buy teaching or classroom materials for children. Nobody appreciates such expenditures but the IRS does.
The IRS encourages K-12 educators to receive up to $250 tax deductions on the materials they buy for their students. This total will get deducted from your income so you can consider such expenditures to receive a tax deduction in the USA.
Deduct the Payment of your Babysitter:
If you want to go out to volunteer for a charitable organization qualified by the IRS and have a small kid who needs someone to care for him during the whole time you would be spending for charitable purposes – hire a babysitter. You can easily claim a tax deduction on the amount you had paid to the babysitter to look after your baby while you were out volunteering.
The Federal Tax Court has passed on the verdict that it will be absolutely fine to include the payment of a babysitter as a charitable contribution on your tax return statement. However, you must have a clear evidence to prove that while you were volunteering the babysitter was performing her duties.
Caring For Elderly Parents:
If you are avoiding a duty you are overlooking the gain!
Looking after our elderly parentsis one of our ethical and moral family duties and most of us fulfill it as an obligation because we love and respect our elder ones.
When you are caring for your elderly parents you can declare him as your dependent and ask for a tax exemption on the amount you spend for their well being. If any of your parents are still an earning member take a closer look at his monthly or yearly income.
Your parents cannot earn more than the annual exemption amount (excluding the Social Security Benefits) and must depend on you for half of their living expenses.Even if your parents do not live with you, it will be considered as a tax deduction as long as you support them financially and pay for their rents, bills, groceries, medicines, and caretakers.
Download our TransparentHands Andriod Application for Online Donation
Deduct Health Insurance Premiums:
Rising medical expenses can cost you heavily blowing off your monthly budgets. Surprisingly, the IRS shows consolation to the taxpayers who are burdened with the cost of insurance premiums.
If you are a service holder and your deductible medical expenses are beyond 7.5 % of your adjusted gross income (AGI) you can claim this expense as the itemized deduction for the tax years 2017 and 2018.
Self-employed individuals are usually responsible for their own health insurance coverage so they might qualify for a 100 % deduction on their health insurance premiums.This amount will be deducted from your adjusted gross income and won’t be viewed as an itemized deduction.
Spend Money for Environmental Causes:
A healthy planet and a balanced ecological system will ensure a sustainable living for humans and animals alike. At present people are hugely concerned about the negative effects of global warming and rapidly growing energy crises on our earth, therefore, IRS offers tax discount on donations made to support environmental causes.
Either support an IRS qualified organization working to protect the environment and its wildlife or you may increase the use of renewable energy at your residence by planting Solar panels, or photovoltaic cells to generate electricity for domestic use.
Laws regarding energy efficiency at your home keep on changing frequently so check the current year’s guidelines before applying for tax discount under this category.
Download our TransparentHands iPhone Application for Online Donation