Charitable contributions are thoughtful, meaningful, and serve innumerable needs throughout our society. They’re also a good way to reduce your tax liability.
Like most tax laws, those involving charitable donations can change. Sometimes annually. That’s why what you did one year might not work exactly the same way the next year.
Here are a few tips on what and how to receive the greatest tax benefit from your charitable donations.
- New this year is a limit on itemized deductions, including charitable contributions, if your adjusted gross income falls into one of these categories exceeds:
- $150,000 if married filing separately
- $250,000 if single
- $275,000 if head of household
- $300,000 if married filing jointly or qualify
- When giving money, get from the charity a record, in writing, of the charity’s name, date of the contribution, and amount. Acceptable substitutes are official bank or payment records, but they must still have a recording of the who, what, and when of the transaction.
- If your donation is by payroll deduction, your W-2 or pay stub will suffice, but it should be accompanied by the document or pledge card that began the donation and that names the charity.
- Please remember that for monetary donations of $250 or more for either money or property you’ll need an acknowledgement from the charity for each donation. However, the IRS may be OK with all necessary information being provided in a blanket statement for both types of donations
Here’s a handy table from IRS.gov to help guide you on whether a contribution is deductible:
| Deductible as Charitable Contributions |
NOT Deductible as Charitable Contributions |
| Money or property you give to: |
Money or property you give to: |
- Churches, synagogues, temples, mosques, and other religious organizations
|
- Civic leagues, social and sports clubs, labor unions, and chambers of commerce
|
- Federal, state, and local governments, if your contribution is solely for public purposes (for example, a gift to reduce the public debt or maintain a public park)
|
- Foreign organizations (except certain Canadian, Israeli, and Mexican charities)
|
- Nonprofit schools and hospitals
|
- Groups that are run for personal profit
|
- The Salvation Army, American Red Cross, CARE, Goodwill Industries, United Way, Boy Scouts of America, Girl Scouts of America, Boys and Girls Clubs of America, etc.
|
- Groups whose purpose is to lobby for law changes
|
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|
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| Expenses paid for a student living with you, sponsored by a qualified organization |
|
| Out of pocket expenses when you serve a qualified organization as a volunteer |
- Political groups or candidates for public office
|
| |
Cost of raffle, bingo or lottery tickets |
| |
Dues, fees, or bills paid to country clubs, lodges, fraternal orders, or similar groups |
| |
Tuition |
| |
Value of your time or services |
| |
Value of blood given to a blood bank |
It’s easy for those who don’t work in this arena to take an incorrect step when claiming a contribution is tax-deductible. Work with a professional in this area and it will contribute greatly to your ability to make error-free tax-deductible contributions.