Donating to Non-Profits: Good Karma and Even Better Tax Breaks
by Stacy Francis, CFP®, CDFA
Tax season is here! A great time for anyone expecting a refund, and a not-so-great time for those who now have to come up with a chunk of cash for the IRS, on top of all their other bills and financial responsibilities. For the financially savvy, tax season is a fantastic opportunity to be clever and score some free money – or at least a smaller tax bill.
One fabulous way to reduce your tax bill is to donate to non-profits. For those of you who usually e-file, note that this rule includes far more organizations than the ones your tax program suggests after you have entered your data. There are literally thousands of non-profits from which to choose – ranging from religious institutions to organizations dedicated to curing diseases to those committed to financial empowerment for women like Savvy Ladies. And the tax break remains the same: if you donate $1,000, you will lower your tax basis with that amount, thus paying up to $350 less in federal taxes, depending on your current tax bracket.
And it gets better. Not only do you get a tax break, but you can help these organizations make the world a better place and improve your own life by generating goodwill and good karma.
No wonder so many US charities blossom!
Stacy Francis is president and CEO of Francis Financial, Inc., a fee-only wealth management practice dedicated to investment advisory services for women, couples and those experiencing divorce. She is also the founder of Savvy Ladies®, a nonprofit organization that educates and empowers women to take control of their finances.