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Heres how giving backcan boost your tax refund.
In addition, many states offer additional tax credits for charitable contributions.
You should give to a charity to support a cause.
A side benefit is the tax deduction.
If you sold the stock for $100, youd pay capital gains tax on the $90 profit.
Another option is cryptocurrency.
Keep Good Records
Checking IRS guidelines and keeping proper documentation are critical to maximizing tax benefits.
Before donating, verify an organizations status using theIRS Tax-Exempt Organization Search.
Only donations to federally approved 501(c)(3) charities are deductible.
In addition, donations over $5,000 could require additional paperwork or an independent appraisal.
For instance, taxpayers often think that a confirmation for an online donation will suffice.
But they should also keep detailed receipts, acknowledgement letters, and for non-cash donations, professional appraisals.
Additionally, taxpayers, especially high-income earners, could consider bunching donations.
The funds grow tax-free, providing flexibility to give when youre inspired.
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