When you donate to your
favorite charities and
causes through Network for
Good, you receive the
benefit of knowing you're
helping to make a
difference. But you're also
receiving the benefit of a
deduction to apply to your
taxes.
Here are some answers to
common questions about
charity and tax deductions.
Network for Good provides
this information for your
convenience. As always,
consult your own tax or
financial advisor before
making personal financial
decisions.
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When I make a charitable
contribution on Network
for Good, is that
contribution
tax-deductible?
It depends!
Every single charity
featured on
ShoppingCause.com has
listed on their home
page if they qualifie for
501(c)(3) non-profit
status from the IRS —
If they do that means every
donation you give counts
as a tax-deductible
donation, but not any
spent with the merchants. It's one of
the ways
ShoppingCause.com makes giving easier
and smarter for you.
When you make a donation
through our site, be
sure to save and/or
print the confirmation
e-mail you receive from
Network for Good for
your tax records.
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I want my giving to be
deductible for this tax
year. Do I need to make
a donation by a certain
time?
Yes. Any donation you
make on or by December
31, 2006 will qualify as
a deduction for 2006.
Any donations made in
2007 (even at 12:01 a.m.
on New Year's Day) go
towards the 2007 tax
year. So if you're
looking for a tax
benefit for 2006, you'll
want to make that
donation soon. The good
news is that you can
donate on Network for
Good any day of the
week, 24 hours a day. So
it's easy to get in that
last-minute donation.
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Do I need to itemize my
tax return to get a
deduction for charitable
giving?
Yes, you do.
Donations are only
tax-deductible if you
itemize deductions on
your tax return. When
you file your taxes,
you'll need to itemize
your donations on the
Schedule A of the 1040
form.
ShoppingCause.com can
help you keep track of
your individual
donations throughout the
year with its innovative
personal
profile feature,
which allows you to
create a Donation
History of the charities
you have donated to, how
much you've donated, and
when.
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Is it worth the time and
effort to itemize just
to get a deduction for
charitable giving?
The
answer to that varies
from person to person
and is subject to phase
outs at higher income
levels. The following
table shows the
automatic deduction the
IRS provides. While this
is more than most people
contribute to charity in
a year, there are other
items that are included
in this amount such as
including interest on a
home mortgage, medical
expenses and business
expenses that exceed
certain base amounts,
state taxes withheld,
and real estate taxes
paid. Your charitable
donations in the form of
cash and volunteer
mileage may help to
lower your tax bill. As
with any major tax
decision, confer with
your own tax or
financial advisor so
you're sure you get the
most out of all your
deductions.
IRS Automatic Charitable
Giving Deduction
|
Filing Status |
2005 |
2006 |
|
Single and
Married Filing
Separate |
$5,000 |
$5,150 |
|
Head of
Household |
$7,300 |
$7,550 |
|
Married Filing
Joint and
Qualified Widow |
$10,000 |
$10,300 |
|
Dependent |
$800 |
$850 |
Volunteer Mileage
Deduction
| |
2005 |
8/25/2005 to
12/31/2005 |
2006 |
|
Volunteer
Mileage Rate |
$0.14 |
70% of the
business mileage
rate in effect,
if done for
Katrina relief
efforts |
$0.14
Hurricane
Katrina
Deduction – 32
cents
Hurricane
Katrina
Reimbursement–
44.5 cents |
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How much can I legally
deduct on my taxes for
charitable
contributions?
You can only deduct
the amount of a
contribution given
voluntarily, with no
expectation of a
commensurate return.
Generally speaking, you
may deduct up to 50% of
your aggregate gross
income — half of your
total income, subject to
income phase-outs. There
are some specific types
of donations (such as
gifts of stock, or
donations to certain
types of organizations)
that have lower
percentage ceilings.
Additionally, if you
receive a financial or
economic benefit in
return for making a
gift, the payment is not
a deductible charitable
contribution except to
the extent that it
exceeds the fair market
value of the benefit.
For example, if you gave
$100 to a museum and
received a book in
return that sells
regularly for $25, you
can claim $75 as a
charitable deduction.
The IRS has a
worksheet to help you
determine how many of
your donations are
tax-deductible.
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I want to donate as much
as I can this year. How
can I do that, taking my
own needs and expenses
into consideration?
This would be a
wonderful time to sit
down with your own tax
or financial advisor —
he or she can help you
decide how much you can
give this year. There
are also a number of
online tools that can
provide you with a rough
estimate for giving,
including the charitable
giving calculator from
the
New Tithing Group.
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I've heard that some
donations aren't fully
tax-deductible, even if
they're to an
IRS-recognized charity.
Is that true?
Some contributions
can be tax-deductible
for less than the
donated amount if the
charity provides you
with something of
substantive value in
return. At Network for
Good, we streamline the
giving process so that
100% of your donation is
tax-deductible — no
worries about what's
deductible and what's
not.
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When I donate, will I
get a receipt?
When you donate
through Network for
Good, you will always
receive a confirmation
e-mail, which will serve
as your receipt. You
also can print the
confirmation page that
appears on your computer
screen after you've
completed your
contribution — that can
also serve as a receipt.
You should always keep a
hard copy of your
receipt for your tax
records. A canceled
check or credit card
receipt is no longer
allowed for any donation
greater than $250. It is
a good policy to obtain
a receipt for any
donation you make and
most charities will
issue one automatically.
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Can I deduct expenses I
incur from volunteering?
Although individual
taxpayers may not deduct
the value of their
volunteering services,
some expenses incurred
while volunteering, for
example, travel expenses
are deductible if they
are not reimbursed by
the charity. The mileage
rate for charitable
deductions for the 2006
tax year is 14 cents per
mile plus tolls and
parking for non-Katrina
related mileage. For
Katrina relief efforts,
you may deduct $0.32 or
be reimbursed 44.5 cents
[IR-2005-138] [see IRS
code Sec 170(i)].
However, travel expenses
are deductible only if
there is no significant
element of personal
pleasure, recreation, or
vacation associated with
the travel and then
limited to necessary
lodging and meals while
away from home overnight
in rendering these
services. For example,
if you volunteered to
help with a youth club
campout, but visited
friends along the way or
spent time with your own
family, you could not
deduct these travel
expenses.
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Getting Started
When you file your
taxes, you will need to
itemize your donations
on Schedule A of the
1040 form. You can
download this form and
the instructions for how
to fill it out from the
IRS Web site.
Your charitable
giving will help so many
— and work to your
advantage as well. We
hope that you'll
consider a donation this
year, and let Network
for Good make it easier
to reap the benefits at
tax time.
