If you’re fond of giving to charity, then you can rest in knowing that good things are destined to follow. Not only are you doing good for society, but you also stand to benefit from donation tax relief. No wonder donating to a charitable organization is something you should never skimp on.
However, tax deductible donations need to meet certain guidelines. Skimp on this, and you won’t get the extra cash to accompany your good deed. Here is what you need to do when it comes to tax-deductible donations.
Document Your Contributions
You should make it the norm to keep track of your tax-deductible donations, regardless of the amount. If at all you made a monetary contribution, qualifying documentation will include a bank statement, a credit card statement, and a receipt from the charity, or a canceled check.
For those who prefer making their contribution as an automatic deduction from their paycheck through their employer, it is ideal to keep copies of your W-2 or pay stubs showing the amount and date of your donation.
Never Miss Out on Tax Deductions for Volunteering
IRS rules don’t allow you to deduct the value of your time or service, but expenses related to volunteering for a qualified organization can help you get a donation tax relief. In this case, expenses must be directly and solely connected to the volunteer work you did, rather than previously reimbursed; and not personal, living or family expenses.
Bear in mind your donation tax relief can include mileage you drive to charitable events and volunteer opportunities, or mileage used to bring items to a donation site. Moreover, you can either deduct your actual expenses using receipts for gas and similar costs, or you can take the standard mileage deduction.
Understanding what goes into a donation tax relief will certainly go a long way in making sure you enjoy money-saving benefits. Remember, your charitable giving qualifies for a tax deduction only if it goes to a tax-exempt organization, as defined by section 501(c)(3) of the Internal Revenue Code.
The good news is you are allowed to verify an organization’s status with the IRS Exempt Organizations Select Check tool. But before making your charitable donations, be sure to ask the charity how much of your contribution will be tax-deductible. It is then that you won’t find yourself missing the donation tax relief.