How to Save Money on Taxes by Donating to Charities
Fulfill your desire to help others by making tax-deductible donations. The good news about charitable donations is that you can deduct them from your income taxes, which in most cases will save you money. With such an outcome, how can you afford not to give?
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Things You'll Need
- IRS Forms
- Cancelled Checks
- Ledger Books
- Calculators
- File Cabinets
- File Folders
- Tax Preparation Software
- Ledger books
Instructions
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Making Donations
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Select a tax-exempt organization qualified to receive tax-deductible donations. See the Related eHow "How to Determine if a Charity Is Qualified to Receive Tax-Deductible Donations" for guidelines.
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2
Learn the Internal Revenue Service's definition of a charitable contribution: "a donation or gift to a qualified organization that is both voluntary and made without getting, or expecting to get, anything of equal value."
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3
Make charitable donations to the organizations you select throughout the year.
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4
Keep records of your donations. For donations of less than $250, a canceled check is sufficient for IRS purposes. For contributions larger than $250, you must get a written acknowledgment from the organization that includes the amount of cash contributed, a description of the property (for a non-cash contribution) and notice of whether you received any goods or services in exchange for the donation. See "How to Keep Proper Records for Donations" in the Related eHows for more details.
Filing Your Taxes
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Gather together your records, listing your individual donations.
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6
Report your charitable contributions by itemizing your deductions on Schedule A of IRS Form 1040.
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Deduct your contributions only in the year you actually made them.
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8
Fill out the relevant parts of Form 8283 if you made non-cash contributions totaling over $500.
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Tips & Warnings
The benefits of donating to charity will vary widely, depending on your personal financial situation. Consult your tax adviser.
Take care to follow all IRS guidelines for documenting and reporting donations. See "How to Keep Proper Records of Your Donations" for more information.
