I just started donating $10 a month to a charity, how does that affect my taxes?

Question

I don't know much if anything about how taxes work. How does donating to charity affect me?

Answer 1

Unless you are filing an itemized long form and already have deductions in excess of the standard deductions, IT WON'T.

Answer 2

Any tax question will have various circumstances that may affect the correct answer and the space to cover all of those aspects is not available here, but the following is a general answer.

Donations to "charity" are deductible if you itemize on a Schedule A. The donation reduces your taxable income, which in turn reduces your tax. Different income levels have different tax rates but if your rate is 15% and you donated $10 a month to a qualified charity you would reduce your taxable income by $120. At the 15% tax rate that would reduce your tax by $18. Generally only those with a home mortgage and/or very large medical bills find it advantageous to itemize their deductions. Each year the Standard Deduction amount is adjusted. Last year it was $10,000 for those married and filing jointly. It was $5,000 for single folks. That would mean that your itemized deduction would need to be greater than those standard amounts before it would be of any "tax" advantage to have donated to charity. For the most part the social or faith benefits of donations to a "charity" far out weigh the tax benefits.

Answer 3

You can deduct charitable contributions from your income, thereby paying tax on a lower income.

For example, hypothetically... Say you make $50,000 a year and you're in the 35% tax bracket.You donate $240 per year to charity. You would pay income tax on $49,760. You would save $84 on your tax.

Make sure you have receipts (or a year-end paycheck stub for United Way deductions). If the IRS challenges the deduction, you'll need the receipts to back it up.

However, as other answers have noted, unless you have a lot of deductions, you'll probably take what's called the "standard deduction," which includes consideration for charitable donations. If you use the "standard deduction," you won't receive any additional tax benefit from your donation.

Answer 4

If you are single, you will need more than $5,000 in deductions for the contributions to have any impact. If you are married and filing jointly, $10,000. Those deductions might include home mortgage interest, property taxes, and state income taxes and other contributions and medical expenses. For many income taxe filers, the $10 monthly contribution will not put them over the standard deduction, unless they have a great deal of home mortgage interest expense.

Answer 5

It won't. It's not enough to make a difference. Donate $300 a month to me and then you can use that as a tax break

Answer 6

Unless you plan on itemizing your deductions (which you might if you also have things like property taxes, interest on outstanding loans, etc.), and unless the total amount of those contributions and other deductions exceeds the "standard" deduction that most people use, it won't make a lick of difference.

Answer 7

This will not affect you but it will benefit you. When tax time comes along again thell the person doing your taxes how much money you donate.

Answer 8

If you're filing a 1040EZ, then donations are not in the picture. However, if you filing itemized, then submit all the donation receipts to your accountant. You will get back a "tad bit" more.