If you’re filed your 2007 income tax returns and find yourself paying out the nose, now is the time to prepare for next year. You’ll find there are some very creative donations you can use to your advantage to help you reduce your burdens in the years to come. Using charitable donations to lessen tax liability is absolutely acceptable and it can especially help those who are living in apartments in Chicago who don’t enjoy the big breaks of mortgage interest.
Before diving in and trying to come up with tax deductions through donations, it’s wise to make sure charities you plan to give to are true non-profit organizations. For federal income tax purposes, a charity should have a 501(c) 3 designation. If you’re not sure, ask!
Now, if you’ve found some charities that work for write-offs and you want to get creative in your giving, consider these options.
A Few Creative Contributions:
Getting rid of a clunker – You can donate and/or sell and then donate a used car, boat, RV or truck to charity. Should you choose to go through an organization by just signing over the title, make sure to get the proper tax paperwork. Some donations have to be proven in writing. In many cases, reputable charities will hold off on giving out paperwork until the donation is sold. This will enable you to take the full sales price off your taxes.
Making it painless – Many people choose to give to United Way campaigns throughout the year. This is an excellent way to lower your tax burden without having to take a single, big financial hit to make a charitable donation.
Having a yard sale and then donating the proceeds to charity – This is a great way to clear out your “junk” and give yourself a tax break at the same time. You can even bolster your offerings by visiting second hand stores for extreme bargains prior to your own sale. Just make sure to get a receipt for your final donation.
Donating property or possessions – If you have things to spare, you can turn them over to non-profit organizations to sell or use. Things like art work, clothing, household goods and so on can all add up to big deductions. Get the receipt and you’ll find this is a quick and painless way to enjoy a deduction.
Short on Cash, 3 Other Ways to Give back:
- Give Blood. Save a life by donating blood at the American Red Cross near you.
- Donate your time. Find somewhere fun to volunteer- animal shelter, afterschool program, street cleanup.
- Champion a cause. Take part in a run/walk for an organization you care about. You could actually raise money just by participating.
Lowering tax burdens is an issue important to many people. If you want to enjoy a break, there are some very creative ways to donate to charity and get tax deductions in the process.
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