If, like many Americans, you are looking for a way to reduce your tax bill, donating to a qualifying charitable organization can help lower your tax burden while supporting a good cause. While many organizations in the U.S. focus on giving back to the community, only a small subset of these will qualify for a tax write-off. These helpful tips can assist you with finding the proper non-profit organization in which to donate funds.
Types of organizations that qualify for a tax deduction
The key component in having your donation lower the amount of taxes you owe is to ensure that the organization you select holds a 501c3 tax law designation by the Internal Revenue Service. Organizations that have a 501c3 tax status must not benefit private interests or have shareholders. Moreover, they may not be politically affiliated.
Before donating, it is important to verify that an organization has a 501c3 status if you wish to claim donation against your tax liability. Often, a quick search on their website should provide you with the information you need to determine an organization’s IRS status. If you can not find the information online, many organizations would be happy to provide that information upon request.
Your tax bill
Now that you know a bit more about which type of organization to donate to, you should also make sure that you file your taxes appropriately. This is especially true if you are filing taxes for the first time with a large monetary donation.
Tax law attorneys are knowledgeable about the numerous legal and financial requirements for filing taxes. They may be able to help you with this process.
Donating to non-profit organizations is a noble endeavor. Through your contributions, you may qualify for a lower tax bill. Also, you can help to make society a better place.