How Donating Helps Your Business Save on Taxes

how does the charitable tax credit work

Over 22,000 people in Maricopa County were homeless last year. With such a statistic, many businesses feel the need to get involved. When small businesses donate to charitable organizations, like Paz de Cristo, it does more than boost employee morale and increase the well-being of your community. There are tax breaks associated with charitable giving that can be given to small businesses — they aren’t just for individuals. If you own a business that is considered small or medium-sized and are dedicated to bettering the lives of those around you, you can benefit as well! You can receive tax breaks if you carefully follow the steps we’ll be discussing in this article.

Educate Yourself on Donations

There are rules to donating funds and items that not only make the process easier for you but are required in order to receive a tax break. To take a charitable deduction, you must ensure that you itemize your deductions. To do this, you should be certain that your total deductions are greater than your standard deduction. Otherwise, you should keep to the standard deduction. 

Knowing what types of donations are deductible, and to what length, is integral, as not all donations are considered equal by the IRS. Say you are traveling to a location to volunteer your services for Paz De Cristo. Perhaps you are taking time to feed evening meals and food boxes to the hungry. The money spent on travel would qualify as deductible, but the time spent volunteering is not. The rule of thumb is that money spent on donations is deductible while time and energy spent on community service opportunities are not. Both actions are valuable and support the community, but it’s good to know and keep record of these for tax purposes.

Should you choose to donate tangible items such as clothing, toiletries, toys, or furniture to those in need, the quality of the items is also important to note. The IRS recognizes items that are in ‘good condition or better’ as deductible. Should you decide to donate clothing in good condition to Paz de Cristo, it could be used for our guests to receive a fresh start.

Keep Track of Funds Directed

Keeping thorough records of donations, whether they be cash or clothes, is vital for receiving a tax break. Card statements, payroll deductions, and proof of donation are all things to keep a record of. If you’re donating more than $250, the IRS needs a letter of acknowledgment of some form, so keep these stored away for tax filing season.

If you have further questions about tax breaks, such as ‘How does the charitable tax credit work?’, or would like to get involved with Paz De Cristo, reach out today! We’d love to hear from you.

Can’t Donate? You Can Still Help Paz De Cristo

food boxes

At Paz De Cristo, we serve to empower each guest that we come across in order to help them become their best version of themselves. We do this by taking away things that are blocking them from becoming self-sufficient. We want our guests to feel respected. Accomplishing this goal takes more than money — it requires efforts from those in our community who are willing to volunteer their time. Donating money is just one way that you can help us improve the lives of our guests. Below you will read more about other things that you can do to make a difference.

Organize a Drive

Businesses, churches, classes, and community members can organize drives for toiletries, diapers, water, clothing, food, and more. These items are vital to bettering the lives of those in need in our community. A drive is a way for a dedicated group of individuals to make a change together, whether they be neighbors, classmates, co-workers, or friends. This shared experience is truly rewarding for everyone involved and beneficial to all those served at Paz de Cristo.

Serve Nightly Meals

Every night of the week Paz De Cristo serves hot, healthy meals to upwards of 200 guests. Groups can come in and participate in meal preparation, serving food and clean-up afterwards.  This is an impactful way to get involved and be more hands on in our mission. 

Volunteer with our Shower Program

Every Wednesday, Paz de Cristo offers our Shower Program from 8am -12pm. This is an opportunity for those in need to take a warm shower, and receive new clothing for a better today, Volunteers assist with intake, cleaning, and clothing distribution every week.

Distribute Food Boxes

Emergency food boxes are prepared in our warehouse and distributed to the public on the first, second and third Tuesday of every month. Volunteers are able to come in and help prepare and distribute emergency food boxes each week. Click here to learn more.  

If any of these seem like the right opportunity for you, we urge you to reach out to Paz De Cristo to learn more. Giving is just one of many ways that you can serve the community and be a part of the change that Paz De Cristo is making.