Your Guide to Charitable Donations and Their Tax Implications

charitable giving tax

The warm, fuzzy feeling that comes with doing a good deed is often reward enough for giving to those in need. However, what makes it all the more rewarding is the fact that charitable donations often have positive implications on your tax return. The deadline for filing your federal taxes is April 15th, 2020 (unless you apply for an extension, which will then mean the deadline is stretched to October 15th, 2020). As such, you will likely be keen to find out exactly what your charitable donations could mean for your return.

Here is what you need to know.

charitable giving tax

Only Certain Charitable Donations Can Reflect Positively on Your Taxes

In order to take advantage of the relevant deductions, you should take extra care in choosing a charity to which you would like to donate. The charity in question should be categorized as a ‘not for profit 501(c)(3)’ charitable organization. Also, remember to check whether or not your preferred charity is listed as an IRS qualified exempt organization. You can do so via the IRS website.

How much can you deduct?

The best case scenario for charitable donations is that you may be able to deduct up to 60% of your adjusted gross income. The amount that you are allowed to deduct from your return will be based on the type of contribution that you have made. Having said that, the absolute minimum amount that you will be able to deduct will usually be no less than 20%.

Remember, if you exceed the limit, via carryover, you will usually still be able to deduct the excess from tax returns over the next five years, possibly more.

Looking for assistance with regard to filing your taxes for the 2019 tax year? Contact Georgen Scarborough Associates, PC today for information on how we can help you.

July 15th – Your Federal Tax Filing Deadline in 2020

tax deadline

2020 is officially in full swing, which means that you are likely starting to think about your tax duties and probably wondering when the cut-off date is. This year, Tax Day and, therefore, the tax filing deadline for the 2019 financial year is July 15th, 2020, which falls on a Wednesday.

Plan to Pay Your Taxes on July 15th, 2020

Plan to file your taxes by the July 15th deadline. If you don’t pay on time, you are likely to incur penalties and/or interest. However, if you know you won’t make the deadline, and think you are going to owe money, send in your payment to the IRS when you apply for a tax filing extension by July 15th.

Applying for a Tax Filing Extension

It will be wise to apply for a tax filing extension if you know in advance that you will require more time to file your taxes this year. If you file for an extension, you will be given until October 15th, 2020 to file your return.

The tax filing extension applies to the tax filing and is not a new due date for your tax payment. So, be sure to send in a payment by July 15th.

If you need help filing for an extension or need to determine how much to pay by July 15th, get in touch with the team at Georgen Scarborough Associates, PC today.