Few things are more satisfying than donating to a worthwhile charitable organization. When you contribute to an organization such as Healing Waters International, you help to bring safe drinking water to parts of the world where it isn’t readily available. While you’re doing good for thirsty people around the globe, you’re also doing well for yourself.
Because your contribution to Healing Waters is tax-deductible, you maximize the value of your gift when you join our Saturate Community. Your contribution changes the lives of others and saturates them with purpose, joy, and meaning.
Exactly what are the tax benefits of donating to a worldwide campaign to bring safe drinking water to everyone? Here are answers to some of the questions people typically ask about charitable donations and their tax bills.
How Much Do You Need To Donate for Tax Benefits?
In order to deduct your charitable contributions, you have to itemize deductions. In 2020 and 2021, there was an exception such that people who did not itemize could deduct a few hundred dollars, but Congress hasn’t renewed that rule for 2022.
It doesn’t make sense to itemize deductions unless your total itemized deductions are greater than the standard deduction. The largest itemized deductions for most taxpayers are state and local income tax, mortgage interest, and charitable contributions. Medical and dental expenses that exceed 7.5 percent of adjusted gross income (AGI) may also be deducted. In addition, you may deduct theft and casualty losses as well as a few types of job expenses.
For 2022, standard deductions are as follows:
Single taxpayers $12,950
Married taxpayers filing jointly $25,900
Heads of households $19,400
If you add up all of your allowable deductions and they come to more than the standard deductions, then you get a tax break for donating to charity. Once you’ve passed the standard deduction, every dollar you give away earns you some tax relief.
What Contributions Can Be Deducted?
The only donations that can be deducted are those made to a 501(c)(3) public charity or private foundation. While it might make you feel good to give $100 to a neighbor who is down on his luck, you can’t deduct that gift on your tax return. It’s important to keep records throughout the year and to retain proof of the contribution. Usually the charity will give you a paper or electronic statement that your donation was indeed a qualifying charitable gift.
Proof of donation isn’t the only reason for good record-keeping. If you keep track of all your deductible expenses throughout the year, it can guide your action as year-end approaches. If you see you are near or at the standard deduction, you’ll know whether additional gifts in the current tax year will be deductible.
Non-Cash Donations
Anything you give with cash, a check, or a credit card is considered a cash donation. However, those aren’t the only types of donations permitted. If you use your vehicle to do volunteer work for a qualified charity you can deduct 14 cents for every mile you drive. You’re required to keep records as you go.
Gifts of material goods are deductible, but some items, especially more expensive ones, may require a qualified appraisal.
You can also deduct gifts of stock, including S-corp and C-corp stocks. Bear in mind that not every charity is in a position to readily receive stock donations. If the issue has appreciated since you acquired it, you can deduct the full current market value.
Tax Brackets
Federal tax brackets depend on income and filing status. In general, the more money you make, the higher your tax bracket, and the more taxes you avoid by contributing to charities. The system is tiered such that the first dollars of your income are taxed at 10 percent, the next portion is at 12 percent, and so forth. High earners can have portions of income taxed at up to 37 percent.
The highest rate at which your income is taxed is called the marginal tax rate. The higher your marginal tax rate, the more taxes you save on charitable giving. If your marginal tax rate is 22 percent, you save 22 cents on every dollar you contribute.
This IRS table shows the 2022 tax brackets.
| Rate | For Unmarried Individuals, Taxable Income Over | For Married Individuals Filing Joint Returns, Taxable Income Over | For Heads of Households, Taxable Income Over |
| 10% | $0 | $0 | $0 |
| 12% | $10,275 | $20,550 | $14,650 |
| 22% | $41,775 | $83,550 | $55,900 |
| 24% | $89,075 | $178,150 | $89,050 |
| 32% | $170,050 | $340,100 | $170,050 |
| 35% | $215,950 | $431,900 | $215,950 |
| 37% | $539,900 | $647,850 | $539,900 |
What Is the Maximum Possible Deduction?
You can generally deduct cash donations up to 60 percent of your adjusted gross income. The limit for appreciated assets such as stocks is lower. They are deductible up to 30 percent of AGI, and, if you’ve held them more than a year, they’re deductible at full market value.
At one time the Pease limitation reduced the allowable itemized deductions for high-income taxpayers. However, the 2017 Tax Cut and Jobs Act removed that restriction, and there are no overall limits on itemized deductions.
A Mission To End the Global Water Crisis
Most of us, when we want safe, healthy drinking water, just push the button on our refrigerator or pick up a jug at the grocery. For millions of people around the world, it’s not that simple. If you’ve made a commitment to charitable giving, whether for the tax benefits or for the good it does, shouldn’t a part of your generosity go to supply this most basic of human needs?
Healing Waters International builds safe water solutions not only to ensure survival but also to help bring prosperity to water-poor communities. Whether you give as little as $25 a month or are in a position to make a large gift, you can bring safe water to those who need it most. Make a difference by going to our donation site today.