It’s that time of year to evaluate your charitable giving for 2018 in order to reap the benefits on your taxes come April (or February if you’re not a procrastinator). It seems counterintuitive, but you can actually save money in the long run by increasing your giving now.
Let me explain. The IRS has an allowance for each individual or couple on their tax liability. If that allowance is less than things like work expenses, mortgage interest, and charitable giving, you can itemize your deductions, thereby reducing your tax liability. The rich know how to maximize this system and make sure that they are very generous to their favorite charities in order to reap the benefits on their taxes each year.
Not only that, you get to direct where those monies are going by picking causes that you want to support financially. We pledge at church, donate to the American Red Cross and World Wildlife Fund among others, and claim part of our memberships to nonprofit organizations. This last one may be something most people may not realize. For instance, our Phoenix Zoo membership is tax-deductible over and above one day’s admission. Check with organizations that you have memberships with like museums, aquariums, and zoos. They may openly state which part of your membership is allowable, or you may have to call.
The deadline to give and deduct that amount on your 2018 taxes is December 31, so act now. You will get a thank you from the organization that you support, and you will be thanking yourself in a couple of months when April 15th rolls around!