While the primary reason that you give to charity probably isn’t the tax deduction, it doesn’t hurt that your generosity comes with a financial benefit. You can reduce your taxable income with the help of the deduction you get for your charitable donations.
As you consider your charitable expenses from last year, and as you plan for the coming year, here are some ways that you can see a tax benefit from charitable giving:
Donate Money
Most of us are familiar with the idea of donating money to charity. When you give, you can deduct your donations if you itemize your deductions when you fill out your tax return. It’s important to note, though, that you will need a receipt from the organization if you give more than a certain amount. It’s best to get a receipt in any case. Even if you give to a church, there is a good chance that you can get a receipt. Keep track of your donations, and then ask for a receipt at the end of the year.
Donate Goods
You can also donate charitable goods and take a tax deduction. You can deduct the current market value of the goods (you don’t base your deduction on what you paid for the item originally). The items you donate must be in good, usable condition. Additionally, you will need a receipt from the organization verifying the value of your donation. You might also need to fill out what you originally paid for the items as you complete your tax return. If you aren’t sure (who really remembers what they paid for something they haven’t looked at in 10 years), you can usually estimate based the current market value of the goods.
Deduct Mileage and Items You Buy for the Charity
If you are actively involved in helping with a charity, you can deduct what you spend in those efforts. You receive a deduction in the amount of 14 cents per mile that you drive on behalf of a charity. That amount isn’t indexed to inflation, so it remains steady, no matter the current conditions, and no matter how prices rise.
Keep a mileage log in your car. Note the date, the odometer reading as you start, and the odometer meeting when you finish. Then total up the miles. Remember that you can on