Tax Savings With Chairty - Donating money, stocks, car, etc
Charity is an important part of the life. Many people have already adopted into stratgey of donating at least 1 - 10% of their total earnings. It does provide tax benefit also when they find tax return.
Donation may not be necessarily in the form on money. It can be stock, commodities or even your household goods or even you car. When you donate anything other than money, the current value of the commodity is noted down. In case if you donate your car that worth is 2000 US$, then you do not have to pay taxes for 2000 US$.
Is this scenarion is applicable to everyone? Unfortunately NO. Because if you use standard deduction, you may not qualify this tax refund on charity. Howver if you itemize, you will get the benefit. But the problem, if you itemize youd deduction, it has to cross over 12000 US$. You will not reach this level until otheriwse you have a mortgage. If you have a mortgage, your monthly interest on your EMI can easily cross this threshold and you can take advantage of itemized deduction.
As a conclusion, what you need to know is, only if you itemize your deductions, then you will qualify for tax benefit for your charitable contritions.