As we enter tax season, it’s important to be aware of key money-saving deduction strategies. Did you know that donating to charities not only supports causes you care about, but can also provide financial benefits in the form of tax deductions? Here’s how tax deductible donations work, what qualifies, and how to get the most out of your charitable giving.

What Are Tax-Deductible Donations?

Tax-deductible donations are contributions made to qualified charitable organizations that can be subtracted from your taxable income, thereby reducing the amount of taxes you owe. Donations must be made to eligible organizations, such as 501(c)(3) nonprofits, to qualify for a deduction. Contributions can include money, goods, or even property, as long as they meet IRS requirements.

Key Requirements for Tax Deductions

Here are the basic rules for claiming a donation tax deduction:

• Qualified organizations. Only donations to IRS-recognized nonprofits or charities are deductible.
• Itemizing deductions. You must itemize deductions on your tax return to claim charitable contributions.
• Documentation. Keep receipts or acknowledgment letters from the nonprofit for any contribution. For donations over $250, additional documentation is required.
• Contribution limits. Deductions are generally capped at 60% of your adjusted gross income (AGI), although lower limits may apply for certain types of donations, like property.

Tips for Maximizing Your Charitable Impact

Some key strategies to keep in mind as you’re doing your taxes include:

• Bunching donations. Consider “bunching” several years’ worth of donations into one year to surpass the standard deduction and qualify for itemization. This strategy is particularly effective for taxpayers with fluctuating income.
• Donating appreciated assets. Giving stocks or mutual funds that have increased in value can maximize your deduction and avoid capital gains taxes.
• Timing matters. To claim a deduction for the current tax year, donations must be made by December 31. Year-end giving is a popular way to maximize tax benefits.

How to File

When filing your tax return, list your donations on Schedule A of Form 1040 if you itemize deductions. Ensure all documentation aligns with IRS requirements to avoid audit risks.

Enjoy Win-Win Giving With Simone’s Kids

You can maximize your giving impact — and your tax deductions — with recurring donations to Simone’s Kids by joining The Village. The Village is a passionate group of donors committed to bettering the lives of children in Uganda by making monthly donations that help to provide better meals, more teachers, more activities, and even post-graduation services. You can even choose which level of education you’d most like to support (or support them all). Give today!

Simone’s Kids in Nakaseke, Uganda, provides high-quality Christian education and meets the basic needs of children to help them break the cycle of poverty. Besides learning, our schools offer a nurturing environment with access to clean water, nutritious meals, safety measures, school sports, vocational training, and an on-site medical clinic. This prepares students for a brighter future. Contact us to learn more!