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Giving back to your community is something that is considered noble and helps to foster additional growth. While altruism is likely your main driver for donating to your local community, it’s important to realize that you can enjoy some tax benefits from it too. This makes it a win-win scenario for both your recipients and your financial state.


You Can Itemize Donations On Your Tax Returns

If you regularly itemize your deductions to get your maximum refund possible from the IRS, then you can include your donations as your items listed to be deducted. You’ll need to document what your donations were, such as cash or other items, and what tax-exempt organization you donated to. This tax benefit is only recommended for those who regularly itemize their deductions. If you opt for the standard deduction, then you likely won’t need to worry about this tax benefit.


IRA Tax-Free Withdraws

One really cool tax benefit of using an IRA to contribute to charities is that those who are 70 and 1/2 years of age or older can do so without taking a tax hit. This is considered up to the amount of 100,000 dollars per year. When this income is withdrawn from the IRA account, it’s not considered taxable income for the year. This can allow you to donate more money without having to worry about the tax implications of doing so.


You Can Deduct Your Expenses As A Volunteer

Let’s say you travel around for your religious affiliation or other charitable organization. As long as they are a tax-exempt organization, you can deduct those traveling expenses from your taxable income. You’ll just need to make sure that the organization you’re volunteering for is tax-exempt. You can verify this by talking with one of the organization officials or by looking it up in the tax-exempt organization search database online. A simple online search will reveal this national database.


Giving back to your community can help to soothe your soul. It also comes along with many great tax benefits that you can take advantage of. Understanding the benefits above can help you to get a little more back next tax season as a reward for your charitable giving throughout the year.