In a world where financial success often intertwines with social responsibility, the intersection of philanthropy and wealth presents a compelling avenue for individuals to make a profound and lasting impact, especially with all the negative events that are currently surrounding us. 

 As a financial firm dedicated to guiding clients towards holistic financial well-being, we believe that harnessing the power of charitable giving goes beyond mere financial transactions; it embodies a deeper commitment to creating positive change and leaving a legacy of generosity. In this blog post, we delve into the transformative potential of philanthropy, exploring how strategic giving can not only align with financial goals but also foster a sense of purpose and fulfillment in making a meaningful impact in the ways we can.

Monetary Donations

Monetary donations matter because they serve as the lifeblood of countless organizations and initiatives striving to address pressing societal challenges. Whether it’s providing essential resources for disaster relief efforts, funding educational programs to empower underserved communities, or fueling innovative solutions to environmental crises, financial contributions play a pivotal role in driving meaningful progress. 

Beyond the practical implications, monetary donations also carry immense symbolic weight, reflecting an individual’s values, priorities, and commitment to making a positive difference in the world. By channeling financial resources towards causes that align with our beliefs and passions, we not only amplify the impact of our contributions but also cultivate a sense of fulfillment and purpose in knowing that our resources are being utilized to create real and lasting change. Plus, you can choose to support any cause on any scale, whether it is a local charity or a national one.

Not to mention, donating to causes you love come with tax deductions, which feels like a well-deserved “thank you” from the government for giving. Not only are you helping others, but you are also helping yourself during the next tax season.

What is a Charitable Contributions Deduction?

A charitable contributions deduction will reduce your taxable income by allowing you to deduct any charitable cash donations you have made. The deduction amount fully depends on the type of donation you have made, as well as how you have filed your taxes.

Also, you can only deduct these charitable contributions if you have itemized deductions using Schedule A of IRS Form 1040.

The deductions also only count towards qualified organizations according to the IRS. This list includes:

• A trust, community chest, or foundation made in the U.S. that is operated exclusively for scientific, religious, charitable, or literary purposes
• Any U.S. organization founded to prevent cruelty to children or animals
• A mosque, church, synagogue, or other religious organization
• A Veterans of War organization

These are just some of the organizations that are considered to be qualified. If you have a particular charity that you love and want to see if it qualifies to receive deductible contributions, the IRS Tax Exempt Organization Search can help you.

 We briefly want to note here that donations to sports clubs, civic leagues, or political candidates are non-deductible contributions. The value of any time that you have spent donating blood or volunteering also cannot be deducted.

How Deductions Work

If you plan to claim deductions for your charity donations, you must record each donation. Your records should show the amount that you donated as well as whether it was cash, non-cash, or out-of-pocket.  

Then the charitable organization should provide a written statement to the donor for any contribution that total more than $74, as well as define if the donation was a contribution and for goods or services.

Final Thoughts

When meeting with your accountant, be sure to ask about charitable donations. Let us know how we can help you with any of your financial goals, even beyond making an impact through charity. Contact us today to learn more about our value based financial planning.

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