Reminder: there are only 26 days left to file your 2013 tax return without an extension.
For the next few days I'm going to discuss what is probably the second largest itemized deduction for most people after their mortgage interest & property taxes - charitable contributions.
Just because you give money or property to a "non-profit" does not mean that the contribution will be tax deductible. There are currently 29 different types of exempt organizations under IRC. Sec. 501(c), however there are only two of these where the contributions are almost always deductible:
- 501(c)(13) - Cemetery Companies
- 501(c)(3) - This is what people generally think of when they think of a not-for-profit. A 501(c)(3) must be organized and operated exclusively for religious, charitable, testing for public safety, literary or educational purposes, to foster national or international amateur sports competition, or for the prevention of cruelty to children or animals.
Another type of organization that is commonly mentioned is a 501(c)(4). These are often social welfare groups that can engage in political activities, as long as politics are not their primary focus. Donations to these groups are generally not deductible.
Tomorrow I will look at the first of the two types of contributions - cash. If you need help with your taxes this year, call me at 832-387-4829 or email me by clicking the little envelope in the top right corner of the page.