Growing up I always was told that there are 2 things in life that I will do( and have no option in them) and they are I will 1. Die and 2. Pay taxes. While we will not discuss the first the second is up for debate. With the extension of the Bush tax cuts corporation, small businesses, and other job-creating individuals are granted some breathing room in an environment that is already sucking the life out of them. Although there has been an extension granted for the Bush tax cuts for the next 2 years, there is not enough stability to plan effectively for the long term due to the uncertainty of the tax code. While there is uncertainty in the tax code, there is an option that will be sure to be around for years to come that can give you an almost instant tax break. Many of the biggest and most vocal tax hawks are always discussing the need for taxes to be able to help people, and benefit the general welfare of others. These tax hawks are always looking for new ways to tax and suck more blood from the “Rich” in the name of fairness.
These are some of the same people that skirt the tax code, and cheat the same people they are claiming to help, but that is an article for another time. How would you like to earmark your tax dollars to go to the causes that you believe are worth while? How would you like to help people in a much more effective and efficient way than the federal government could ever dream of? Well if you answered yes you are in luck because the United States tax code allows you to do just that. The United States tax code allows you to earmark your tax dollars to benefit any organization that the internal revenue service deems qualified. The best part about this is that you are able to deduct up to 50% of you gross income with the charitable giving tax deduction. I can say that this is one thing that government has finally gotten correct. Could you imagine the kind of goof that some of your favorite charities received the money that you would have been sent to the IRS?
Take a second and imagine the millions of lives that could be saved if for 1 year everyone donated 10% of their gross income to their favorite charities. Bill Gates and Warren Buffett came together recently at an event and proclaimed that with the right funding that all of the top 10 mostly deadly diseases in the world could literally be eradicated. That is correct no more aids, Hiv, hpv, malaria, and other deadly diseases that take the lives of many people every year. How about all of the homes that could be built with habitat for humanity for many low income families that often do not have any other option than the one that is provided by habitat for humanity? How about all of the scholarship opportunities that could be funded with the tax dollars of many people who believe in providing scholarship opportunities to people who really need them? How about the best part about this you being able to give money to the causes and charities you believe in and save a bundle of cash from your yearly tax bill?
There is also a pretty big ripple effect that is to be felt from this because the more the private sector can do to solve the problems of many Americans, the less the government has to get involved. I would suggest that everyone take a second and find 5 really good charities with a great track record of making good use of the resources they have available, and give yourself a tax break right now. Your tax rate doesn’t matter when you can deduct the entire tax bill. I would be hard pressed to find someone that is absolutely excited to pay taxes, or feel as though the government does not take enough money out of their pay check every month. As with all things you should check with you accountant or financial planner/advisor before making any significant changes to your finances that you are not sure about.
I am a big fan of paying lower taxes in general, but it really puts a smile on my face when I can make a difference in the lives of others. What charities or causes would you donate to? How much of your gross income would you donate to give yourself and instant tax break?
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