How Do You Benefit By Donating Money to Charitable Organizations?

There is no greater bliss than making other people happy, especially the underprivileged. Donating money, food, clothes, and whatever you can for charity is the best way to give back to the society.

Some people believe that charitable organizations do not serve the purpose, or they feel that they misuse the funds. While it might be true with a few shady organizations, it is not the case with all the institutes.

Some of the reputed and government recognized NGOs and non-profit organizations take every possible step to help the needy across the planet. By donating money to reliable organizations, you will surely feel the sense of satisfaction of sharing joy with helpless people.

By making donations, you are not only supporting the good causes, but also saving money on your tax returns. For this, you need to keep a track of all your donations, cash and non cash. Make sure you collect the receipts of all the donations that you have made in the financial year. This will help you to write off your taxable income.

Donate to Licensed Charities

You need to ensure that you donate to best charities that qualify as tax exempt organizations. For non-cash or cash donations that you make to a charity, which does not have this status, you will not be able to include it while filing returns.

Thus, before you make contribute to a cause, make sure that you verify the status of the organization with the government authorities.

Limitations on Donations

There is a limit on the amount of money that you can donate, and take advantage of reducing your taxable income. Generally, you cannot deduct anything more than 50% of your total earnings in the form of donation.

However, in some cases, you may be limited up to 30% based on the kind of contribution you are making, and to which organization you are donating to. If it is the first time you are filing taxes on your contributions, then it is suggested that you consult an experienced tax advisor.

Exceptions

There are a certain exceptions like, you cannot deduct your personal expenses or value of time spent on volunteering for any charitable organization programs or events. For instance, you cannot deduct your one day’s pay, if you have spent a weekend volunteering for any program.

You also cannot itemize any contribution made to help an individual. On the other hand, what you can deduct is the amount spent on buying a uniform or other accessory to volunteer works organized by a charitable trust.

Keep Records

The thumb rule here is to keep all the documents despite of the sum of money that you have donated. If you paid by cash, then you need to have credit card or bank statement, or a receipt from the organization. If the contribution was an automatic deduction from your payroll, then you need to keep your payslips showing the transaction.

For non cash items like property, land or vehicle, you could check with your tax advisor, as to what documentation need to be produced, in order to reduce your taxable income.

Arthritis National Research Foundation has received the ratings of four stars by Charity Navigator, and is considered as one of the best charities. We offer complete transparency and financial information on all of our fundraising activities for various causes.

Article Source: http://EzineArticles.com/expert/Rajesh_B_Sanghvi/1284637

Article Source: http://EzineArticles.com/8705235

This entry was posted in Uncategorized. Bookmark the permalink.