Tax Challenges: Understanding Deductible Donations
Because of the Internal Revenue Service rules there are specific things that one must do in order to qualify for reducing your taxes Donations such as groceries, eyeglasses or hearing aids, gifts and other direct gifts can be deducted from your taxes provided that the rules are adhered to. When you receive a plea from an organization regarding adopt a family charitable donations it is important that you make the inquiry about how to make these donations so they may be claimed on your taxes. Here are some of the options that you may be able to take advantage of:
Donate directly to organization - if you are approached by an organization and asked to sponsor a family over the holidays, ask if they are a 501(c)3 certified organization. In most cases, if the organization is properly organized, you can make a cash donation directly to the organization which would be deductible;
Self-employed business deductions - in some instances, those who are self-employed may be able to claim gifts up to specific amounts under marketing expenses. This of course does not allow the business to make an anonymous donation. Before you decide if this is appropriate in your specific case, contact a tax specialist to find out if this is possible as it may not be;
Donate cash to appropriate organization - if you have been contacted by an organization that does not have a 501(c)3 certification, reach out in your community and find an alternate organization. Frequently you may find that there are organizations that are collecting gifts, food and other necessities that can provide you with a receipt for your donation.