Many of us look for ways to reduce our taxes. You can invest in personal loans, insurance and other different means, but have you ever thought about charity? Yes, there are several charitable programs that provide tax deductions, but it’s vital that you know the restrictions on your contributions.

Deductible and non-deductible contributions

According to IRS standards, 501(c)(30) businesses are subject to the charitable tax deduction. This can include literacy, scientific, religious, child care, and amateur athletic organizations.

You can be happy knowing that if you contribute to any of the organizations mentioned in 501(c)(3), you are eligible for tax-deductible donations. Well, there’s a twist. Not all of these contributions offer you this advantage.

Here are some options where the tax is deductible:

• Deductions with respect to property must be made on the market value

• Intangible property such as mutual funds, bonds, stocks

• Contribution of goods such as jewelry, cars, furniture and old clothes

• Contributions of money such as credit cards, checks and type of currency

Non-deductible options included:

• Political group of candidates

• Civic league, unions, sports clubs

• Profitable hospitals and schools

• Draw raffles, bingo or lottery tickets

• Gifts given to a person

Selecting the Appropriate Charitable Tax Deductions

Since you now know about tax-deductible gifts, the next step is to choose the appropriate charitable trust and take advantage of them. If you have a small business, then the cancer charity might be a tax-saving option.

First, you should do your research on different types of charities. Be patient and realize the type of charity you want to do. When you’re happy with the institution, make your donations the way you want.

Be sure to make your donation in accordance with the category restriction. Once you pay the donation for the entire year, just keep in mind that you have to route it through form 1040 Schedule A.

Consider keeping all records of donations made, for example, to children with cancer. Any type of charity will give you a receipt for the donation made. This can occur later when you pay your taxes.

Know the limits of your contribution

To some extent, the restrictions put forth by the IRS would never affect taxable deductions. If your contribution is more than 20% of gross income, then there may be a restriction. Again, this can vary, depending on the type of organization you are donating to.

According to IRS standards, if you have specific contribution limits, you must pay them within 5 years, as long as the excess you carry over does not exceed 50% of gross income.