Now that B and I itemize on our tax return, we can take advantage of a few great tax allowances. First and foremost--the entire reason that we itemize in the first place--we can claim all of the interest that we pay on our mortgage. We are in the early years of our mortgage (the 2-year anniversary of the closing of our mortgage is less than 2 months away), so the majority of our payments go toward interest. The mortgage interest benefit is great for us.
Another tax allowance is charitable contributions, which you can claim when you itemize. In the past, my charitable contributions have been scattered--when friends or coworkers participated in runs/walks/bike rides/whatever, I contributed to their campaigns. When I received return-address labels in the mail from a charitable organization and used them, I'd write them a check.
This year, we want to plan our charitable giving and make a conscious effort to contribute more towards charitable (and tax-deductible) causes. I hit the internet, trying to find a reasonable amount that we should contribute towards charity. Some religions dictate 10% of your income, but that number is not realistic for us. I found some statistics for the UK, and the article said that the average Brit contributes .8% of their annual income towards charity, while the head of several charitable funds recommended 1.5% (and higher percentages for higher salaries). We decided that somewhere in the middle was a reasonable goal for our first year of planned charitable giving.
For 2008, our goal is to contribute 1% of our adjusted gross income to charity. We want to continue contributing to coworkers and friends who participate in charitable fundraisers, and we also want to contribute more to our alma maters and any other causes that we believe in.
On a side (but somewhat related) note, we're also interested in micro loans. People in developing countries or even the US can register for smallish loans (usually under $1,000) and post their stories ("I need to buy supplies so I can start a general store in my town, which doesn't have a store," or something), and anyone can lend any amount, even as little as $25. With most sites, you get interest on top of the amount that you lend. There's always a risk that the lendees will default on their loans, but lending smaller amounts minimizes your overall risk. Of course, making interest off of a loan cannot be considered a charitable endeavor, but lending to someone who might not otherwise have access to loan funds is a worthwhile thing to do.
