Using Charitable Gift Donations to a 501(c)(3)

Making charitable gift donations to a 501(c)(3) can help you make a difference for a worthy cause and achieve tax benefits at the same time. Here are the basics of making charitable gift donations to a 501(c)(3).

What is a 501(c)(3)?

A 501(c)(3) is a charitable organization that files the appropriate paperwork with the IRS. They have to prove that they are in operation for certain charitable purposes. These organizations have annual income of over $5000 in order to qualify. Some examples of 501(c)(3) are churches, charities, educational institutions, scientific institutions, and some sports organizations.

Cash Gift

Whenever you can give a cash gift to one of these charitable organizations, you will be able to make a tax deduction when you file your taxes. According to IRS rules, you can deduct up to 50 percent of your annual income with this deduction. For every dollar that you contribute up to 50 percent of your income, you will be able to deduct a dollar of taxable income. This is going to potentially put you in a lower tax bracket and it will lower the amount of money that you have to pay in taxes overall. In order to utilize this deduction, you have to itemize your deductions instead of taking the standard deduction that is available when you file your taxes.

Appreciated Assets

You can also donate appreciated assets to these char

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