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TAX DEDUCTIONS

Maximizing Your Tax Deductions: A Guide to Smart Donations

At Family Promise of the Triangle, where we're dedicated to making a difference in the world while helping you maximize your tax deductions. As a 501(c)(3) nonprofit organization, we understand the importance of effective charitable giving and the benefits it can bring, not only to the causes you care about but also to your own financial well-being.

 

Here's how you can make the most of your donations and optimize your tax deductions:

 

Donate to Qualified Charities: To claim a tax deduction, ensure that you donate to organizations that are recognized as tax-exempt by the IRS. Family Promise of the Triangle is a qualified 501(c)(3) organization, meaning your donations to us are eligible for tax deductions.

Itemize Your Deductions: To claim charitable deductions, you'll need to itemize your deductions on your tax return using Form 1040 and Schedule A. Keep records of your donations, including receipts and acknowledgment letters from the charities you support.

Consolidate your Deductions: If your charitable deductions are not large enough to qualify for a Schedule A consider consolidating donations that you may be making over multiple years into a single year so that you reach the threshold required by a Schedule A. For example, instead of making a yearly donation of $1,000 to your favorite nonprofit make a single contribution of $3,000 every 3 years.

Donate Appreciated Assets: Donating appreciated assets such as stocks, mutual funds, or real estate can offer significant tax advantages. By donating these assets directly to Family Promise of the Triangle or other qualified charities, you may avoid capital gains tax while still claiming the full fair market value of the asset as a deduction.

Consider Donor-Advised Funds: Donor-advised funds (DAFs) allow you to make a charitable contribution to a fund, receive an immediate tax deduction, and then recommend grants to specific charities over time. It's a strategic way to maximize your deductions while maintaining flexibility in your giving.

Utilize Qualified Charitable Distributions (QCDs): If you're over 73 and have an individual retirement account (IRA), you can make direct charitable contributions (up to $100,000 annually) from your IRA to qualified charities like Family Promise of the Triangle. These distributions can count toward your required minimum distribution (RMD) and may offer tax benefits.

Keep Records and Documentation: It's essential to keep detailed records of your charitable donations, including receipts, acknowledgment letters, and any relevant forms or documentation provided by Family Promise of the Triangle or other charities.

Consult with a Tax Professional or Financial Advisor: Tax laws and regulations can be complex and subject to change. Consult with a qualified tax professional or financial advisor to ensure you're maximizing your tax deductions in accordance with current laws and regulations.

By following these tips and partnering with Family Promise of the Triangle, you can make a meaningful impact on the causes you care about while optimizing your tax benefits. Together, we can create positive change in our communities and beyond. Thank you for your generous support and commitment to making a difference. If you have any questions or need assistance with your donations, please don't hesitate to contact us.

*Family Promise does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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