Can I Deduct Gifts to Charities?

Yes. If you made donations to qualified charitable organizations during the tax year, you may be able to claim a charitable contribution deduction if you itemize your deductions on Schedule A.

Qualified charitable contributions can include:

• Cash donations
• Donations made by check, credit card, debit card, or electronic payment
• Donated property, such as clothing, furniture, household goods, or vehicles
• Certain unreimbursed expenses incurred while volunteering for a qualified organization (including eligible mileage expenses)

To learn more about charitable contributions and deduction requirements, see IRS Publication 526.

If you made charitable donations during the year, you can enter them in our software under:

1. Federal Section
2. Deductions – Select My Forms
3. Itemized Deductions
4. Gifts to Charity

Which Organizations Qualify for a Charitable Deduction?

Generally, you can deduct contributions made to qualified organizations that are organized and operated for:

• Charitable purposes
• Religious purposes
• Educational purposes
• Scientific purposes
• Literary purposes
• The prevention of cruelty to children or animals

If you're unsure whether an organization qualifies:

• Contact the organization directly and ask for proof of its tax-exempt status.
• Use the IRS Tax Exempt Organization Search tool to verify that it's eligible to receive tax-deductible contributions.
• Contact the IRS Tax Exempt/Government Entities Customer Account Services at 1-877-829-5500.

What If My Donation Was $250 or More?

If you make a single charitable contribution of $250 or more, you must obtain a written acknowledgment from the organization before claiming the deduction.

The acknowledgment should include:

• The amount of any cash contribution
• A description (but not the value) of any property donated
• A statement indicating whether you received any goods or services in return for the contribution
• A description and good-faith estimate of the value of any goods or services received, if applicable

It's important to remember that separate donations are generally treated separately.

For example:

• If you donate $25 each week to your church, each $25 payment is considered a separate contribution.
• If you make three separate $100 donations to the same organization, each donation is treated separately rather than as one $300 contribution.

In these situations, the special acknowledgment requirement for gifts of $250 or more would not apply because no single donation exceeded the threshold.

What If I Received Something in Return for My Donation?

If you receive a benefit in exchange for your contribution, you can generally deduct only the amount that exceeds the value of the benefit received.

Example

You pay $100 to attend a charity fundraising gala.

• Ticket cost: $100
• Fair market value of dinner and entertainment: $40

Your deductible contribution is $60.

Only the portion that represents a true charitable gift qualifies for a deduction.

Can I Deduct Non-Cash Donations?

Yes. Donations of property may qualify for a charitable deduction.

Common examples include:

• Clothing
• Furniture
• Household items
• Electronics
• Vehicles

Generally, you'll deduct the item's fair market value at the time of the donation.

Fair market value is the price a willing buyer would pay a willing seller when neither party is required to buy or sell and both have reasonable knowledge of the facts.

For used items, the deductible value is typically much lower than the original purchase price. Keeping records that support the value of your donation is always a good idea.

Can I Deduct Volunteer Expenses?

You can't deduct the value of your time or services. However, certain unreimbursed expenses directly related to volunteer work for a qualified organization may be deductible.

Examples may include:

• Supplies purchased for volunteer activities
• Postage costs
• Certain travel expenses
• Eligible mileage driven while performing charitable services

Keep receipts and records of these expenses in case you need to substantiate your deduction.

What Charitable Contributions Are Not Deductible?

The following generally can't be claimed as charitable deductions:

• Contributions made directly to a specific individual
• Donations to organizations that aren't qualified charities
• The portion of a contribution for which you received a benefit
• The value of your time, labor, or services
• Personal living expenses
• Qualified Charitable Distributions (QCDs) from an IRA
• Appraisal fees
• Certain contributions to donor-advised funds
• Certain contributions involving partial interests in property

Do I Need to Itemize to Claim Charitable Donations?

In most cases, charitable contributions are claimed as an itemized deduction on Schedule A.

If your total itemized deductions are less than your standard deduction, taking the standard deduction may provide a greater tax benefit. Our software automatically compares both methods and helps you choose the option that results in the best outcome for your return.

Keep Good Records

Proper documentation is one of the most important parts of claiming charitable deductions. Depending on the amount and type of donation, you may need:

• Bank records
• Credit card statements
• Receipts from the organization
• Written acknowledgments for larger donations
• Records supporting the value of donated property

Good recordkeeping can help ensure you receive the deduction you're entitled to and avoid issues if the IRS requests additional information later.