Tax Tips Tuesday: Charitable Donations
Charitable donations pay twice, a new chance for recipients and tax breaks for givers
By The Tax Institute At H&R Block
Whether charitable donations are things the givers no longer want or are large sums of cash, these gifts help the recipients and also can lower the giver’s tax liability. For example, for every $100 in eligible donations made by someone in the 25-percent tax bracket, their tax liability is reduced by $25.
Nearly 90 percent of American households make charitable donations and in 2012, individuals gave more than $223 billion in items and cash. For charitable donations to be claimed on tax returns, they must be made to qualified, tax-exempt organizations that meet specific guidelines. Also, the taxpayer must itemize deductions and must meet certain substantiation requirements. The current cap for deducting cash contributions is half of a taxpayer’s income and lower caps apply to certain non-cash contributions.
For more information about charitable donations, visit www.hrblock.com.