Giving to charity is undeniably life-affirming, and as an added advantage, it can help with your tax bill. If making charity donations is part of your tax plan, then you should understand what it takes to maximize your tax-deductible donation Singapore before year-end. After all, you want to reap maximum benefits.

Unfortunately, not everyone understands how to go about this. And they are not to blame since it entails numerous things than meets the eye. So how do you maximize your tax-deductible donation without feeling the heat? Below are a few tips worth considering.

Donate Stock to Charities

If you aren’t into the prospect of donating cash before year-end, consider giving stock instead. Check to see if your desired charity has a brokerage account to accept your donation. You might wonder what makes stock great to donate.

Well, the value of your stock donation is equal to the fair market value of the shares, which is what they would sell for on the date of the gift. Furthermore, you won’t pay any capital gains taxes. You can donate stocks through your investment broker.

Itemize to Deduct Charitable Donations

Generally, you can claim a charitable donation on your taxes if you decide to itemize your deductions.  If your itemized deductions exceed the standard donation for your filling status, you should elect to itemize to reduce your taxes.

Before filing your tax return, ensure you get an acknowledgement letter from the charity, containing the organization’s name, amount and contribution date. Also, be sure to keep a canceled check or credit card receipt for your records. It is only then that you can benefit immensely from a donation tax relief.

Rounding Up

Now than you have insights into what it takes to maximize your tax-deductible donations, why not try them out. Bear in mind you can deduct all your charitable contributions for the year as long as they don’t exceed 20% of AGI. But in some limited cases, you can deduct contributions up to 60% of your AGI.

To prove how much you contributed, you need to keep records. The type of record you keep depends upon the donation. For a tax write-off, you will need to keep a bank record for cash donations. Ensure your receipt provides the name of the qualified organization, the date and contribution amount before you can finally take the next step of action.