Tax Deduction Info

Tax Deduction Info

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These are general guidelines that are for informational purposes, for NPOs, churches, causes, and individuals to know about, regarding raising money via affiliate programs and their taxes.  We always recommend that you consult a qualified professional in your jurisdiction as we are not able to give specific tax advice.

Are there any limits to tax-deductibility?

The IRS has specific rules about tax-deductibility and charitable giving. We always recommend that you consult a qualified professional in your jurisdiction as we are not able to give specific tax advice.

However, here are some guidelines to consider:

–  You can choose to give money to as many causes as you wish during the year.
–  You cannot give more than $250 to any single cause in a given month, to make sure that you stay within the IRS limits on gifts without a receipt directly from the cause.
–  A cause must be eligible for tax-deductible donations in order for you deduct the amount given

Are you qualified to give tax advice?

We are not tax attorney’s, accountants, or anyone officially qualified to give tax advice – that’s why we always suggest you contact a local financial adviser.

Do all of my purchases count for deductions?

Let’s start with a reminder, we are not tax professionals and we suggest you consult a qualified local adviser to ensure that your purchases meet the requirements for a tax deduction.

A few guidelines:

  • The cause to which you donate must qualify under Section 170 of the IRS code as a nonprofit organization. Good news, many small causes do NOT have to be 501(c)3 registered. Your donation to your small cause may qualify for a tax deduction, even if it isn’t registered.
  • You may not take a deduction until the cause receives their commission payment.
  • The tax year reflects the year funds were sent to your cause
    (which may not be the same as the year you made your purchase).
  • You must have provided your mailing address, prior to making a purchase.
    • Beginning in 2007, the IRS has changed the documentation rules for charitable deductions. You may need a receipt from your cause in order to satisfy IRS requirements. We provide your donation information to your cause so that they may issue a receipt.

Do you need my name and address for my donations to be tax-deductible?

Yes. According to the IRS regulations, for a donation to be credited to you, we need your name and address on file. We will not reveal your information to third parties without your prior permission.

How do I get a tax deduction from shopping?

When you make a purchase for a cause, the vendor sends the cause back a portion of your purchase amount, the “affiliate commission.” If you’re donating to an organization that qualifies under section 170 of the IRS code as a nonprofit, your donation may be considered tax-deductible. If your cause is small, it is possible that it doesn’t need to be a “501(c)3”. To ensure that your donations through purchases are tax-deductible, the IRS has defined a set of requirements, which you can learn from the IRS.gov web site.

The donation would occur when the cause receives the commission, not when you make the purchase.

 

How do I report this to the IRS, and how do I find out all of this for myself?

We recommend that you consult with a qualified tax adviser in your state to confirm that your purchases are eligible as a tax-deductible contribution. You can bring them a copy of your “Shopping Activity Report” as an itemized list of your purchases and the cause(s) they benefited.

The IRS currently doesn’t require anything more than a listing for a donation under $250 to any one cause.

 

What causes are eligible for tax-deductible donations?

We recommend that you consult a local financial adviser, as each jurisdiction varies in their rules and laws.

If you’re donating to an organization that qualifies under section 170 of the IRS code as a nonprofit, your donation may be considered tax-deductible. If your cause is small, it is possible that it doesn’t need to be a “501(c)3”. To ensure that your donations through purchases are tax-deductible, the IRS has defined a set of rules on IRS.gov

Ultimately it is your responsibility to know for sure if the cause you choose to support qualifies, or not, for a tax deduction.

For more information, see IRS Private Letter Ruling 9623035. Remember, ultimately your personal tax situation affects your ability to take any tax deductions, so you should consult your tax adviser.

What doesn’t count for a deduction?

To be tax-deductible, the IRS wants to make sure that:

  • You’re giving away your money and that your donation is voluntary.
  • Your donation is going to a cause of your choice.
  • Your money is being donated to an entity that qualifies under section 170 of the IRS code.
  • You get a written receipt from the cause for donations over $250 and have an itemization of donations less than $250.
  • No deduction is taken prior to the money actually being disbursed by your agent.
  • Only donations through purchases count towards tax deductions.

Unfortunately not all funds raised are eligible for tax deductions.

  • any bonuses you may earn through a vendor do not count for deductions
  • funds donated to causes that are not eligible under the tax regulations.

We recommend that you consult a local financial adviser, as each jurisdiction varies in their rules and laws.

Why do you provide this service?

We believe that enabling tax deductions helps to encourage some individuals to use our service.

For more information, see IRS Private Letter Ruling 9623035. Remember, ultimately your personal tax situation affects your ability to take any tax deductions, so you should consult your tax advisor.

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