Claiming Charitable Donations on Your Tax Return
The holiday season is a time of goodwill and charity. People in the holiday spirit may donate to an organization or nonprofit they support. That said, any charitable donation made could be tax deductible. We’ll look at what this means and how to file charitable donations on your tax return.
What are Tax Deductions?
According to the IRS, a tax deduction is the amount you subtract from your yearly income when filing taxes. That said, a deduction lowers the amount of income you’re taxed on. When claiming a deduction on your taxes, you’ll need documentation for the expenses you want to deduct. Most online tax software will calculate deductions for you through specific tax forms. For paper filers, your deductions will go on Form 1040 and will likely require additional forms.
What is a Charitable Donation?
A charitable donation is a gift of money or goods to an organization or nonprofit that’s tax-exempt. Gifts to individuals do not count as charitable donations and cannot be claimed as deductions. Acceptable charitable donations for a tax deduction include those made to nonprofit educational agencies, religious organizations, volunteer fire departments, and a host of other nonprofit groups. You can see if a charitable donation to a nonprofit organization qualifies on your next tax return by using the IRS’s Tax Exempt Organization Search.
How Do I Claim a Charitable Donation?
Per the IRS, you can deduct up to 60% of your adjusted gross income as charitable donations, although this amount may vary depending on the contribution type and organization. Before making a charitable donation, it’s smart to ask the organization what percentage of it qualifies for a tax deduction. It’s also wise to ask for a receipt or other documentation as evidence of your donation. To claim charitable donations of money or goods on your tax return, it's best to itemize your deductions by completing a Schedule A tax form. When making a charitable donation, be sure to keep the December 31 deadline in mind for filing this year’s taxes.
What Else Should I Know?
If you’ve made a charitable cash or property donation of more than $250, the IRS requires a written acknowledgment from the organization indicating the amount donated, as well as the value of goods and services received in return, if applicable. For noncash donations of more than $500, you’ll need to fill out Form 8283. An appraisal of your item(s) must be attached to this form if their value exceeds $5,000. You can also deduct expenses related to volunteer work with qualified organizations when filing your taxes. These expenses must be directly related to the volunteer work and can include things such as mileage or gas. That said, be sure to keep any receipts related to volunteer work.
As the adage goes, “it’s better to give than to receive.” But by giving, you may be receiving a tax break. For more information about claiming charitable donations on your taxes, visit the IRS’s website.
Hunter Morrison
About Hunter Morrison
Hunter has freelanced for various print and radio publications across Northwest Florida, including The Bay Beacon, Navarre Press, Inweekly, Crestview News Bulletin, and WUWF. He was also the Editor in Chief of the University of West Florida’s student newspaper, The Voyager. In 2023, Hunter moved to Kenai, Alaska to take up a news reporting position with KDLL Public Radio. For fun, Hunter enjoys cross-country skiing, hiking, photography, thrifting, traveling, and looking for the best Thai food around.