Sunday, December 4, 2011

Charitable Tax Deduction

The Revenue Act of 1917 first created the charitable income tax deduction. It has long encouraged Americans to give back to their communities by providing tax deductions for contributions to charitable organizations. In fact, studies have shown that the tax policy has a big impact on charitable giving. For example:
  • Itemizing households accounted for 70% of the $229 billion in charitable donations in 2008.

  • The 2 % of taxpayers in the top bracket were responsible for 33 % of all charitable giving in 2008.

  • The power of the incentive can be seen in the timing of charitable giving, with more than 20 % of annual online charitable donations made on December 30 and 31. We see this at Charity Navigator when our web traffic spikes dramatically at the end of the year, even in just the last few hours of the year!

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