Keeping in mind the ways you can give to charity is a way to protect your estate. The amount you give is a real tax incentive in Texas. You might have used deductions before, but if you error here just a bit, you’re sure to get penalized. There are only a few ways to ensure that you give to legit, credible charities. When you do, that amount is subtracted from your taxable income.
Up to $300 without itemization
Itemization is specifically the act of choosing what you’ll deduct from your income via a list of IRS options. Charity, for this reason, can be itemized and set aside to reduce your taxes. Your giving and overall tax responsibility are tracked in terms of 12 months. Each year, the amounts you gave need to be accounted for during your tax filing. The taxes you normally pay are still required. However, items that are legally itemized and reported will reduce the taxes you have.
A 60% limit on your income
Yes, you have the right to give all of your money away. However, in no circumstance can you claim a charitable deduction that equals 100% of your income. There’s no limit to what you can give, but the IRS will only itemize up to 60% of your current income as set aside for charity. There are some special considerations that are likely to reduce that 60% limit. For example, you can’t honor a full 60% if you gave to fraternal societies, VA organizations or private funds.
Allowing charity to build your legacy in Texas
As a secondary benefit to building your legacy, you have the legal right to reduce your taxes or avoid them entirely. Taking these steps in a legal, wholesome way starts with making the right filing with the IRS.
