Charitable contributions can reduce your taxable income as well as your tax burden. However, to receive the full benefit, your charitable donations and other itemized tax deductions must exceed the standard withholding amount for your tax return status.
How to request the deduction
Most people don’t donate more than 20 percent of their adjusted gross income, of course. However, if all of your tax deductions add up to more than your standard withholding amount, it is worth making a listing as you can lower your tax burden.
Other allowable deductions include medical and dental expenses, state and local taxes, taxes on real estate and personal property, mortgage interest and points, mortgage insurance premiums, investment interest, and losses in the event of accident and theft due to a federally declared disaster.
Charitable Withdrawal Strategies
Bundle your prints
It may not be possible to donate enough each year to receive the charitable deduction. One strategy is to consolidate or bundle deductions from multiple tax years.
We made many of our deductions over the past year so we could list our taxes and determine the value of our deductions. And we may cut this year and increase the deductions the following year. It makes a lot of sense to summarize your deductions in one tax year.
Give money to funds recommended by donors
When you put money in a fund recommended by donors, you can make a deduction right away and later decide which organization to forward the proceeds to.
This also gives you the option to increase your donations in a given tax year for tax deduction purposes.