Contributing to IPAT’s Pedaling for Possibilities fundraising event helps ensure that more individuals who need assistive technology devices, but can’t afford them, get the support they genuinely need. Beyond the realization that your contribution has made a significant difference in someone’s life, did you know that there are other related benefits to having made this contribution?
If you itemize your deductions on your Federal income tax return, you may be able to reduce your taxable income by claiming certain donations you make to qualified charitable organizations. IPAT does qualify as a 501 (c) (3) organization under the Internal Revenue Service regulations and is therefore eligible as a qualified public charity. There are certain other rules and limits for using charitable contributions as deductions however, and generous taxpayers should keep these in mind to ensure that tax returns are completed accurately. Of course, to be sure that you’re receiving all allowable write-offs consult your own tax adviser about your specific tax situation.
Applicable rules, limits, and procedures:
- You must actually donate cash – a pledge or promise to donate is not deductible until you actually pay.
- Your contribution is considered paid when you put the check in the mail or when it is charged to your credit card.
- Your donation is only deductible in the year that it is made – make sure your donation is made by December 31st of the year in which you plan to claim a deduction.
- Record keeping requires written documentation that includes the name of the charitable organization, date of the contribution, and the amount contributed. Cancelled checks, bank/credit union or credit card statements, or acknowledgement letters are examples of how this requirement could be met.
- You can generally deduct cash contributions in full up to 50% of your adjusted gross income.
- Claiming your donations is done on Schedule A (Gifts to Charity) for your Form 1040 tax return.
- IRS Publication 526, Charitable Contributions is available as a tax return preparation resource.
The above is predicated on the continuation of tax regulations as we’ve known them! Tax reform may effect charitable contributions and the opportunity to use them as a tax deduction. We’ll be watching for the outcome of how these tax breaks will be addressed.