The holidays are the time of giving and when many people choose to help those in need by making donations to favorite charities. Did you know that these contributions can actually reap benefits for you?
You’ve probably heard the phrase “write off” or “deductible expense” but many people don’t fully understand what that means. Simply put, the purpose of tax deductions is to decrease your taxable income, thus decreasing the amount of tax you owe to the federal government.
Any charitable contribution is tax deductible up to 50 percent of your income. And you can get tax savings with non-cash donations as well. Eligible deductions include the purchase of a new coat for a coat drive or food for a food drive, or making a donation to Goodwill, Salvation Army or other charities that accept gently used items. Follow these tips to make the most of your charitable deductions:
Source: Forbes.com and CNBC.com
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