Public charities versus private foundations

Calculating the deduction: Public charities versus private foundations

Men and women can take charitable deductions only if they itemize deductions on their tax returns. Men and women may perhaps deduct as much as 50 percent of their earnings to public charities, and as much as 30 percent to private foundations.

Corporations can take a deduction of as much as ten percent of their earnings, no matter no matter if the organization they’re donating to is usually a public charity or private foundation. Consider Taxes For Dummies by Eric Tyson for extra information on deductions. Documenting your tax-exempt status At some point, your organization may perhaps be asked to document its tax-exempt status. By way of example, lots of donors won't make contributions to charities that do not qualify for deductibility beneath Section 170, and they may request anything named a Letter of Determination.

A Letter of Determination is usually a formal notification that the IRS sends your organization when its tax-exempt status has been authorized. Donors may also verify your tax-exempt status by checking IRS Publication 78, which can be titled the Cumulative List of Organizations. This publication is an annual listing of
a large number of tax-exempt organizations to which contributions are deductible as charitable donations.