Tax right off?

Question

I am wanting to donate money to The March of Dimes and I don't know how it worked at the end of the year come tax time.It's my first time every donating to a charity. I want to give the charity 5,000 or so dollars by the end of the year. Can I write all that off on my taxes or will it just be a percentage of that???

Answer 1

Daniel is correct in that you will need to have adequate documentation for such a large amount in case you are audited. Please note that if your total household income is over a certain amount limitations may come into play for charitable contributions. For example limitations begin at $150,000 for MFJ.

Answer 2

If you itemize, then you could include a donation to the March of Dimes as an itemized deduction as a charitable contribution. Your tax savings would be the amount of the deduction times your tax bracket, so if you give $5000 and you are in a 15% bracket, your tax savings would be $750. "Write off" doesn't mean you subtract it from your tax, it means you subtract the amount from your income before you calculate your tax.

If you don't itemize, then you don't get any tax benefit from a charitable contribution. You only itemize if your total itemized deductions is more than your standard deduction. For 2007 the standard deduction is $5350 if you are single, $10,700 if married filing a joint return.

Answer 3

It's "Write-off."

Yes, charitable donations come off the top of your taxable income, but only up to a certain limit. And over about 500 you have to have good documentation. Call your local HR Block.