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Category: Finding Deductions

An Overview of Deductions for Gifts to Charity

You can deduct contributions or gifts that you may have made to various organizations during the tax year. Qualifying contributions can be made in cash, property (clothing, furniture, household items, or vehicles), or out-of-pocket expenses (such as mileage) you paid to do volunteer work for a qualifying organization. For more information on qualified contributions, please review Publication 526

If you did make any qualifying contributions to charitable organizations during the tax year, you can enter these under: Federal Section > Deductions > Enter Myself > Itemized Deductions > Gifts to Charity.

Organizations that Qualify

You can deduct contributions or gifts you gave to organizations that are religious, charitable, educational, scientific, or literary in purpose. You can also deduct what you gave to organizations that work to prevent cruelty to children or animals.

If you made a contribution, but are not sure if the organization qualifies as charitable, please:

  • Check with the organization to which you contributed as they should be able to provide for you verification of their charitable status
  • Call the IRS Tax Exempt/Government Entities Customer Account Services at 1-877-829-5500 (Monday through Friday from 8:30 a.m. to 4:30 p.m. EST).

Gifts of $250 or more:

You can deduct a gift of $250 or more ONLY if you have a statement/receipt from the charitable organization showing:

  • The amount of any money contributed and a description (but not value) of any property donated
  • Whether the organization did or did not give you any goods or services in return for your contribution (if you did receive any goods or services, the estimated value and description of what was received must be listed).

In figuring whether a gift is $250 or more, do not combine separate donations to the same organization. For example, if you gave your church $25 each week totaling $1300 for the year, treat each $25 contribution as a separate gift or if you gave an organization 3 separate gifts of $100, treat each gift separately rather than a $300 donation. Since each payment is a separate contribution and you would NOT be required to have the statement/receipt as described above.

Gifts from which you benefit:

If you gave a gift or contribution and received a benefit in return (such as food, merchandise, entertainment, or services), you can generally only deduct the amount that is more than the value of the benefit.

Example: You paid $100 to a qualifying charitable organization to attend a fund-raising dinner and the value of the dinner and entertainment was $40. Your deduction would be $60 ($100 - $40 = $60).

 

Non-cash Gifts or Contributions:

 

Generally, if you made non-cash contributions, such as clothing, furniture, household items, or vehicles to a qualifying organization, you can deduct the value of that property. If you gave used items, you should only deduct the fair market value at the time you gave them. “Fair market value” means what a willing buyer would pay a willing seller if neither is in a position that they MUST buy or sell, and both are aware of the conditions of the sale.

 

Gifts you CANNOT deduct:

You cannot deduct any of the following expenses or contributions:

  • Gifts to civic leagues, social and sports clubs, labor unions, and chambers of commerce
  • Foreign organizations (except certain Canadian, Israeli, and Mexican charities)
  • Groups that are run for personal profit
  • Groups whose purpose is to lobby for law changes
  • Homeowners' associations
  • Individuals
  • Political groups or candidates for public office
  • Cost of raffle, bingo, or lottery tickets (you may be able to deduct these as a “Miscellaneous Deduction” see IRS Publication 529
  • Dues, fees, or bills paid to country clubs, lodges, fraternal orders, or similar groups
  • Tuition
  • Value of time or services
  • Value of blood given to a blood bank