Redirecting your Tax Dollars through Giving

Love one government administration, hate the next, and never like where the money is being spent. That sums up many peoples view of tax dollars at work. Wouldn’t it be nice if we could check some boxes on our tax return specifying where we want our money spent?

Since that is not going to happen any time in our foreseeable future, here is the GO! plan for redirecting some of your tax dollars to activities you support…Give.

As part of a commitment to community, each year a portion of GO! profit is donated to organizations including Linn Benton Food Share, United Way/GAP, Oregon HEAT, CARDV and The Heartland Humane Society.

The average U.S. household gives about 2% of their ‘disposable income’ defined as after tax income. Cash donations from individuals make up 83% of donations to non-profits each year. 2008-2009 saw the steepest decline of giving since Giving USA started reporting statistics in 1956.

Small amounts help. Many people feel that if they give, they should give big. Not the case, a few dollars per month to a cause that means the most to you can make a difference. If you gave $5 per month, that’s $60 per year. If a hundred people did the same, that’s $6,000. Most non-profits survive on individual giving.

Giving Cash and Taxes:

As a self employed person, I pay self employment tax which is Social Security and Medicare. Giving has no impact on this tax. In 2010, this amount was 15.3%. In 2011, the tax has been reduced via the 2010 Tax Relief Act to 13.3%. So for every dollar of profit I make in 2011, 13 cents is going to pay Social Security and Medicare Tax.

Enter Giving:

For giving to help at tax time you must choose to itemize your deductions. Your CPA or CTP can advise you if it is in your best interest to choose a standard or itemized deduction.

Each time I give money to an eligible non-profit (Exempt Organization), I am redirecting some of my tax dollars. On average, for every dollar a person gives, 34 cents are saved in taxes. Rephrased, each time I donate a dollar:
9 cents redirected from the State to the non-profit
25 cents redirected from the Feds to the non-profit
66 cents redirected from my pocket to the non-profit.

Ensure you are donating to an eligible non-profit. To be considered an Exempt Organization the organization must not endorse or contribute to political campaigns.

Search for Eligible Exempt Organizations (Publication 78)

Giving Stuff… Simplifying your life, getting organized and staying that way:

Turn that thought of ‘I might need that some day’ to ‘someone probably needs this now.’

You can receive a tax deduction for the retail value of your donated stuff. Thanks to Jack Moran, CPA, GO! has a valuation guide to help clients correctly value in-kind donations. Jack says “Many people under value what they give.” Accurately valuing your donated goods helps to reduce the taxes you owe.
For every dollar in goods I donate:
9 cents redirected from the State to my pocket
25 cents redirected from the Feds to the my pocket
Stuff I will not use and do not need redirected to folks in need.

GO! Practices Repurposing
In-kind donations from clients are donated to local schools, non-profits, Cat’s Meow and Goodwill. GO! takes spare office supplies to local non-profits. Unique items are sent to silent auctions like Heartlands Wine & Whiskers. Unused toiletries can be donated to Community Outreach. Old blankets and towels go to Heartland Humane Society. Got Books? Donate them to the public library.

Don’t let that stuff go to waste! Goods and food expire. Stored and forgotten items are more likely to get damaged by changes in environmental conditions. Even clothing degrades when stored over time.

Move from recreational shopping to recreational giving! You will help create a better community while keeping clutter out of your life.