Are you getting the most out of your charitable giving? Charities fought a hard battle to protect the tax deduction last year, worried that any governmental changes regarding the charitable tax deduction would reduce individual giving. For most people, receiving tax benefits is not their sole incentive to give to nonprofit causes, but donors should take advantage of the deduction while it remains at its current level (individuals can deduct 30-50 percent of their income). This article by Independent Sector details the government’s tax benefits extension, and how it affects individuals and nonprofit organizations.
Only individuals who qualify to itemize their deductions are able to take advantage of the charitable tax deduction. Additionally, the government has introduced new regulations regarding tax deductions – mostly related to contributions from your IRA and the giving of non-cash items. These regulations, and other considerations such as appropriating the value of in-kind goods or services, may be good to keep in mind when filing your taxes this year.
One of the benefits of establishing a donor-advised fund at a community foundation is receiving an immediate tax deduction when you make contributions to your fund. Some donors say this function makes their charitable giving easier to itemize during tax season. Check with your financial advisor to make sure you are receiving the full benefit of your 2012 charitable gifts.
Related articles
- Over 40 nonprofit officials and experts to testify on charitable deduction (Chronicle of Philanthropy)
- Gifts to charity pay off for everyone (Yahoo! Finance)
- On the charitable tax deduction (Philanthropy in AAction)
- A flourishing donor-advised fund (Philanthropy in AAction)
Photo credit StockMonkeys.com