Just reading the title will make you interested and ask: Will giving a car or other donation automatically reduce the tax I pay? But unfortunately, the answer is NO. Even though you are a generous person and likes to donate your belongings, it does not necessarily make a tax deduction for you.
After we discuss what is a tax deduction in the previous post, this time we will talk about things that need to be considered so that the donations we give affect the tax reduction. There are so many, but only four important points will be discussed that the authors feel are most important in making donations.
There are several important points that you must pay attention to before making a donation so that you get a tax deduction. Next, I will share 5 important things related to donations so that it can affect the tax reduction.
1. Choose a credible charity institution.
Before you really want to contribute something, the most important thing is, you have to find the right place. Because not all charitable institutions are recognized by the government so that the donations that you give will not affect the amount of tax you pay. If you ignore this and make a donation, your main goal of reducing taxes will be in vain because of choosing the right place.
2. Donations to individuals have no effect on tax deductions.
You have full rights to who and where your goods will be donated. But, if your main goal is to reduce taxes, then you must pay attention to this. Donations given to individuals (for example to friends or neighbors) will not affect the amount of tax that you bear. This is also in line with our first review, so make sure that you pay attention to points 1 and 2.
3. Receipt or Note for each donation that you have provided.
If you make a donation in the form of physical items, such as donating your old car, your watch, and other valuable things, then you will get a handover receipt. But what if you want to contribute some cash? Do cash contributions also affect tax deductions? Yes, this can apply. If you have proof of legal handover of the money donated. So, make sure you get a receipt or receipt after making a cash contribution.
4. Pay attention to the reciprocal value of a charitable organization.
You, as donors will get additional services or commonly referred to as donor incentives from charitable organizations (such as banquets, etc.). But you don't worry, because every charity organization will definitely help you to calculate everything until you will get a tax deduction.
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