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!

Should you do your own taxes?

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.

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