Another good thing about charitable donations is that they can be deducted from your taxable income. Yes, you are still giving away some money, but you are actually giving away less than you think due to the tax savings you receive. In other words, $100 given to charity and listed in your itemized deductions, is really only a $75 donation for someone in the 25% tax bracket. The result is the charity receives the full benefit of $100 even though you only pay $75. So who pays the other $25? Well, that is indirectly paid by the government to your charity. So when considering how much to give to charity, remember that if you itemize your deductions on your income tax return, you are actually giving less. Which, in turn, means you can give more, right?
Money Magazine shares a few tips on selecting a charity if you don't already have one or two favorites you donate to regularly. Find the article here.
Keep on giving, because what goes around, comes around.