If you itemize deductions on your tax returns, in most cases, the first tangible benefit of making a gift of cash to the Amputee Coalition of America today is an income tax charitable deduction for the full value of the gift. The resulting reduction in income taxes payable lowers the net cost of the gift. If you are subject to state and/or local income taxes as well as federal, the combined marginal rate (after the federal deduction for those income taxes paid) should be taken into consideration in determining the gift's net cost.

If you don't usually itemize deductions, you may want to consider it for any tax year in which you make a sizable charitable donation. One technique used by people who have few itemized deductions is to alternate between years in which they take the standard deduction and make few charitable gifts, and the years in which they give double their usual annual philanthropic support and shift to itemizing.

Beware of the annual limitation on the use of charitable deductions claimed for gifts to public charitable organizations. For cash gifts, the deduction is limited to a maximum of 50 percent of your adjusted gross income in any year. Any unused deductible amounts can be carried over and used for up to 5 additional years, if necessary.

If you predict that your estate will be subject to estate tax at your death, keep in mind that you receive a federal gift tax charitable deduction for the value of gifts of cash made during your lifetime. Since the value also is removed from your future estate, it completely eliminates the federal estate tax. This savings reduces the net cost of your charitable gifts.

 

Outright Gifts and Their Results

A gift by check is one of the most common methods for making an outright charitable contribution. For gifts by check of $250 and more, donors must have written confirmation from the charitable donee, as canceled checks are no longer sufficient proof of a deductible gift at this level. Canceled checks are acceptable for checks of less than $250. True cash gifts (not checks), regardless of the amount, must be evidenced by a receipt from the charitable organization.

 

For more information, please contact Kendra Calhoun at 202/360-5655 or by e-mail at kcalhoun@amputee-coalition.org