Need wallet.org says “In general, you can deduct up to 60% of your adjusted gross income via charitable donations, but you may be limited to 20%, 30% or 50% depending on the type of contribution and the organization.” but I don’t know what those words mean 😆
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Let’s say you earn $100 at your job. You have e deductions for health insurance, 401K, federal taxes, local taxes, and state taxes. So out of that hundred you take home say $70. Now here is where donations come into play. The federal, state, and local taxes are based off your wages after the 401 and health insurance is taken out. The 401K was $5 and your health insurance was $10. That means you paid $15 in taxes. One thing you can do is and a lot of rich people will do this. You buy a piece of art. You then have that piece of art apprased at a much higher price than you paid. (obviously this is over simplified) now you donate that art to a charity. The amount the painting is worth you can now deduct from your taxable income just like the 401k or health insurance. So if the painting was worth enough. You won’t have to pay the $15 in taxes. Again. Very simple but this is ELI5
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