COLORADO SPRINGS, Colo. — This week thousands of Coloradans are taking part in Colorado Gives Day, and there are ways that people who give can get back.
Colorado is one of a few states that offer a charitable tax benefit, but only if you claim the basic standard deduction on their federal income tax return and you gave more than $500. A filer gets to deduct for every dollar over $500 they donated to a "qualifying organization" for state income taxes.
Qualified organizations include:
- Religious organizations including churches, temples, synagogues, or mosques;
- Nonprofit charitable organizations;
- Nonprofit educational organizations; and
- Nonprofit hospitals and medical research organizations.
"In general, the charitable contribution subtraction is calculated by subtracting $500 from the total amount of qualifying contributions made by the taxpayer during the tax year," information from the Colorado Department of Revenue Tax Division reads. "For example, if a taxpayer who is eligible to take the charitable contribution subtraction made several qualifying contributions totaling $1,200 during the tax year, the taxpayer could claim a charitable contribution subtraction of $700."
There are some other rules provided to the IRS on the process that can be read by clicking here.
Tax expert, Kathy Byklas with Your TaxLady in Colorado Springs, tells KOAA that a lot of people aren't aware of the benefit. It also includes more than just monetary donations.
"Everybody wants to lower their taxes," Bylkas said with a smile. "You do have to upload your receipts from whatever charity you're giving to. And if it's Good Willies [An organization like Goodwill] you have to detail more than 16 pairs of underwear."
Byklas broke it down stating that someone who donated $1,500, or $1,500 worth of merchandise, and kept records could claim a charitable contribution subtraction of $1,000, resulting in a savings of more than $40. The more you give, the more you can take advantage of come tax time.
There are a lot of organizations that don't qualify for this tax benefit in the Centennial State.
Non-qualified organizations include:
- Civic leagues, social and sports clubs, labor unions, and chambers of commerce;
- Foreign organizations (except certain Canadian, Israeli, and Mexican charities);
- Groups that are run for personal profit;
- Groups whose purpose is to lobby for legislative changes;
- Homeowners’ associations; and
- Political groups or candidates for public office.
For more details on how to take advantage if you donate, click here for resources from the State.
____
Watch KOAA News5 on your time, anytime with our free streaming app available for your Roku, FireTV, AppleTV and Android TV. Just search KOAA News5, download and start watching.
