You may or may not have heard of the term “501(c)(3),” but it is an important term when it comes to charitable giving. According to the IRS tax code, an organization with 501(c)(3) status is tax-exempt, which means donations to the organization can be taken as a deduction when it comes time for you to complete your annual tax return. Pretty straightforward, right? Wrong.
There are over 25 different codes under the 501 IRS tax classification umbrella. And, each one means something different for both the organization and the person that is supporting that entity.
Here’s what you need to know before you make your next donation: