Charitable Tax Deduction Answers

A simple guide to possible tax implications & advantages of donating to a 501(c)(3) nonprofit charity.

When you donate to a 501(c)(3) public charity, you’re entitled to take an income tax charitable deduction — which could mean reducing your taxable income and lowering your tax bill. When you donate to Omega Retreat, you’re also making the world a better place by helping to provide frontline COVID healthcare workers with much needed rest and rejuvenation.

Below you’ll find some common tax-related questions and answers. 

First, charity donations will only help reduce your tax bill if you itemize your deductions. Generally speaking, you want to itemize deductions if your combined total of deductions — including charitable gifts — exceeds the standard deduction for your income bracket.

For example, the standard deductions for 2021 are as follows:

Single — $12,550

Married filing jointly — $25,100

Head of household — $18,800

Always maintain a record of your charitable contributions. Taxpayers tend to use the larger deduction, standard or itemized, when filing taxes.

If you want to deduct your charitable contributions and receive a tax deduction, you’ll have to itemize your deductions. List your qualifying deductions and add them up — if it’s more than the standard deduction, itemizing can save you money.

Some of the most common qualifying deductions include:

  • Mortgage interest
  • State & local tax
  • Charitable giving (Omega Retreat)
  • Medical & dental expenses

Whenever you give to a 501(c)(3) like Omega Retreat, whether it is cash, securities or other assets, you’re generally eligible to take an immediate tax deduction.

Thanks to the Consolidated Appropriations Act, in 2021, you can deduct up to 100% of your adjusted gross income, when donating cash to a qualifying public charity (like Omega Retreat).

Let’s face it, we can all use some tax relief — and giving to a nonprofit is a fantastic option. With Omega Retreat (and other qualified charities) you get both a tax deduction, and the satisfying feeling of helping a worthy cause.

Here are some simple steps to help make sure your deduction is legal and approved by the IRS:

  • First and foremost, make sure that the nonprofit organization is a bonafide 501(c)(3) public or private charity.
  • Make sure you get a receipt and keep it for your records. Omega Retreat issues automatic email receipts immediately after your donation.
  • If you’re donating tangible property or other noncash contribution, you may need to have it appraised to establish a realistic value.

With your receipts in hand, itemize your deductions (or hand things over to your CPA) and file your tax return.

Your filing status and taxable income will put you into a specific tax bracket — and every taxpayer is in one of those brackets. In actuality, we’re all in several brackets because the marginal tax rate actually changes the percentage of your income that you’re taxed on. Your tax bracket refers to the first tax rate applied to your income.

For 2021, here is a table of tax brackets:

RateUnmarriedMarried JointlyHead of Household
10%$0$0$0
12%$9,950$19,900$14,200
22%$40,525$81,050$54,200
24%$86,375$172,750$86,350
32%$164,925$329,850$164,900
35%$209,425$418,850$209,400
37%$523,600$628,300$523,600

Source: IRS

Great question! The Pease limitation reduced itemized deductions for higher-income taxpayers. This limit was removed with the Tax Cut and Jobs Act of 2017 — so the Pease limitation is no longer in the tax code.

As long as the recipient of the contribution is a public charity, it’s possible — however, in practical application, most charitable organizations simply don’t have the resources to accept and liquidate those assets.

If you are considering donating stocks to Omega Retreat, please reach out to us and discuss implications to find out if we can accomodate the contribution. 

The tax information provided is general and educational in nature, and should not be construed as legal or tax advice. Omega Retreat does not provide legal or tax advice. Content provided relates to taxation at the federal level only. Charitable deductions at the federal level are available only if you itemize deductions. Rules and regulations regarding tax deductions for charitable giving vary at the state level, and laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of the information provided. As a result, Omega Retreat cannot guarantee that such information is accurate, complete, or timely. Tax laws and regulations are complex and subject to change, and changes in them may have a material impact on pre- and/or after-tax results. Omega Retreat makes no warranties with regard to such information or results obtained by its use. Omega Retreat disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Always consult an attorney or tax professional regarding your specific legal or tax situation.

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