Tax Deductible Donations

Written by Rylee Newton
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If you're planning on donating cash or goods to help support a cause, it's important to understand the way in which the IRS categorizes charitable organizations. In most cases, when you donate cash or goods to a 501(c)(3) organization, you can write off the donation on your annual taxes. In order to obtain this status, an organization must provide evidence of its charitable activities and intentions to the IRS.

501(c)(3) organizations focus their efforts on a variety of different charitable purposes. Many of these organizations are founded with the intention of providing medical and scientific research. Others focus their efforts on religious programs, or programs that help to increase literacy rates nationally and around the world. Still others focus their efforts on preventing cruelty to animals or children.

Classifying 501(c)(3) Organizations

The best way to determine if your donation is tax deductible is to verify 501(c)(3) status. You can do this by requesting information from the IRS or directly from the charity. 501(c)(3) organizations fall into three different categories depending on their foundation status. These categories help to determine the maximum deduction amount an individual donor can claim on his or her taxes.

The three classifications of 501(c)(3) charities are public charities, private foundations, and private operating foundations. Donors can write-off up to 50 percent of their gross income for these charities, but there are stipulations depending on the type of donation received. If you're not certain what class of donation you've made, it's important to check with your accountant for further advice.


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