Tired of Being Taxed to Death? Be Generous

March 30, 2007 By Matthew Paulson

Whether you know it or not, over half of your annual income is going to the government. You might think that it’s not that much because all you see is what is taken out of your paycheck, however after delving deeper in, you’ll find out that you’re being extremely highly taxed.

Think about it. In addition to your payroll deductions, your employer has to match your Medicare and Social Security taxes and that’s money they could have used to compensate you. You pay state and local taxes, such as a state income tax, a state sales tax, and property taxes. You pay taxes on gasoline and other consumable goods. You indirectly pay for the cost of regulation of businesses and taxes on businesses. All of the costs of working within the governments rules are eventually passed onto the consumer. Let’s face it, we’re being taxed to death!

A lot of people rightfully try to lower their tax burden by using accountants to do complex calculations to keep as much money of theirs as possible, and who can blame them!? Some people even try to create deductions out of nowhere so they can pay less taxes. If you’re tired of being taxed to death, you might consider making some tax-deductible donations to help the world and save money on your taxes.

Under federal law, You can donate money to 501(c)(3) organizations and not have to pay anything for taxes on that money. You will have to itemize your deductions to claim this tax deduction, but in most cases it makes sense to itemize, especially if you own a home. You’ll want to check with an accountant to see what’s the best option for you.

In order to donate money to a non-profit organization, such as the American Red Cross, and have it be tax deductible, you’ll need to get a receipt or acknowledgement from the organization that you give money to if the amount is over $250.00. If the amount was less than that much, you can just claim the deduction.

Of course you shouldn’t just give money because it creates a tax deduction, that just doesn’t make mathematical sense. You should give money because you can use your resources to genuinely help people. You can give money to prevent the spreading of HIV in Africa, give victims of a natural disaster a leg up, research uncured diseases, and more. There’s so much good that your money can do in the world if you find a genuinely worth cause.

You can do a lot of good with your money should you choose to donate some of it, you shouldn’t do it alone for the tax deduction, but if you have the option of donating pre-tax dollars versus after-tax dollars, there’s no reason to not take the deduction.

Consider donating to some of these very worthy causes:

The March of Dimes
American Red Cross
American Cancer Society
The Salvation Army
The Gutenburg Project