Charity brings meaning to life. The donor is deeply satisfied with his own self when his gift is able to change a life and serve a greater purpose to humanity.
Charity is a two-way path. The more you give the more blessings you get in return. Giving to charity helps both the recipient and the donor. While charity enables an individual to gather the strength to face the struggle of existence on this planet it also helps the donor to save some extra cash on his personal tax return statements through his generous efforts.
1 – Looking after elderly parents:
Our elderly parents are our loved ones and obviously an important part of our family so getting a tax discount against the money you spendto support your parents may seem awkward. IRS views your elderly parents as a part of your extended family which is why you can declare them as your dependents and may claim a tax discount on the money you spend for their caring.
You must make sure that your parents aren’t earning more than the annual exemption amount excluding any Social Security Benefits. In order to qualify for a tax discount under this category, your parents must take half of their monthly expenses from you.
2 – Sports and Entertainment:
If there is a local sports team, art center, or Community Theater registered with IRS in your locality your donations to these institutes will qualify for tax discounts.
Keep an eye on the value of any gifts or benefits that you may receive in return for your generous act such as free tickets, coffee mug, or a plated dinner etc. The value of the donor incentives should be subtracted from the write-off.
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3 – 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.
You may support an IRS qualified organization working to protect the environment and its wildlife like The World Wildlife Fund (WWF) 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.
4 – Donate to IRS Qualified Charities and Trusts:
Nothing could be more valued than saving a life or feeding a hungry child or providing shelter to a distressed woman. Donate to organizations that are qualified charities by the IRS and are working to promote social security and justice.
You can receive a big tax discount on the amount you have donated to these organizations. You may use the online tool IRS Exempt Organizations ;select Check to find out charitable organizations or trusts registered with the IRS.
5 – Donate Appreciated Assets:
Donate appreciated assets like stock, bonds or precious metals to charitable organizations. Donating such assets will reap double benefits for you. You will be free from paying any Capital Gains Tax (CGT) and be able to deduct the fair market value of the property at the same time.
Donors who aren’t familiar with the CGT law in the USA should consult with an expert tax attorney to extract the maximum benefit from making a donation under this category.
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6 – Voluntary Work:
The time you have spent for voluntary causes won’t qualify for any tax discount. Even if you take some time out from your business hours which would cost you a handsome amount and spend it for charitable causes you will be allowed $0 tax discount for your generous consideration.
However, you can deduct the expenses you spend for the campaigns or deduct the miles driven for charitable purposes, although suchdeduction is much lower than the standard rate and you may not benefit handsomely from the tax discount under this category.