Identifying Charities Eligible To Receive Tax Deductible Contributions

If you're counting on a federal income tax deduction for donating to a charity, you should confirm that the charity has been approved by the IRS as a tax-exempt organization eligible to receive deductible contributions.

For some charities, this is easy - everybody knows the American Red Cross, the Salvation Army, and Goodwill are IRS-approved tax-exempt charities. But what about verifying that tax deductions are allowed for contributions to less well-known charities? Good question.

To determine which organizations are tax-exempt outfits eligible to receive deductible contributions, follow this procedure.

It is not necessarily a deal-breaker if an organization is not on the IRS-approved list. For example, some churches and church-related organizations may not appear on the IRS website's list of tax-exempt organizations because they are not actually required to apply to the IRS for tax-exempt status. For a non-church organization, not being on the IRS-approved list doesn't necessarily mean it's not IRS-approved, but serious skepticism is appropriate. If you're still considering a contribution, ask the organization to send you a copy of the IRS determination letter that recognizes its tax-exempt status.

It's smart to be skeptical about making significant contributions to organizations that claim to be tax-exempt organizations. Taking the steps outlined in this letter is probably a good idea even if you don't care about a tax write-off. If you have questions or want more information about deducting charitable contributions, please contact us.

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