Your guide to charitable tax deductions

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Your guide to charitable tax deductions

Updated August 30, 2019. In 2018, charitable giving rose about 1% year-over-year to more than $427 billion. That’s an average of more than $2,500 per household, and 68% of total donations came from individuals as opposed to businesses. It’s a good thing to do, and altruism is a reward unto itself.

Tax deductions are also a reward, though, and you may be able to get those for your donations, too. Deductions lower what you owe in taxes for the year (your taxable income), so if you paid too much, you'll be eligible for a tax refund.

Here’s everything you need to get started, from the tax forms you need to what charitable donations you can actually deduct.

Who can claim the deduction

To claim you’ll need to include Schedule A of Form 1040 when you file your tax return. Schedule A allows you to itemize your deductions, and charitable contributions are a type of itemized deduction. (Other common deductions are for state and local property taxes, as well as mortgage interest.)

You can only itemize if you’re claiming deductions that are worth more than the standard deduction. This means most people won’t be able to itemize. For the 2019 tax year, the standard deduction is $12,200 for individuals (up form $12,000 in 2018), $24,400 for married couples (up from $24,000 in 2018), and $18,350 heads of household (up from $18,000 in 2018).

So if your filing status is single in 2019 and you have itemized deductions of $11,000, you do not qualify to itemize and you won’t be able to deduct any charitable contributions . You will need to take the standard deduction instead. (Note that standard deductions doubled from 2017 to 2018 because of changes to the tax code.)

For more explanation on who can itemize, read our guide on how to file your taxes in 2019.

How it works

If you can itemize your deductions, you will need to fill out the "Gifts to Charity" section of Schedule A. Just enter the amount of money or the value of items that you donated.

However, there are some extra steps if you made individual donations worth $250 or more. For gifts of $250 or more (whether they’re cash or non-cash donations), you need a statement from the charity confirming how much you gave and whether or not you got anything in return. (If you did get something back, it changes the final amount you can deduct, but don’t worry, we’ll come back to that later.)

It’s important to clarify that $250 is for a lump sum donation, not the total from separate donations. The IRS itself gives a good example: If you donate $25 to your church every week, each weekly donation counts separately. Even though your total donations for the year would be $1,300, you wouldn’t need to get a statement from the church about what you gave because none of your individual donations was $250 or more.

Anyone who had a donation of $500 or more will need to fill out Form 8283. Just note that this only applies to donations that aren’t by cash or check – so donating a car, for example. There’s also a section on Form 8283 that you’ll need to fill out if you’re claiming a donation of more than $5,000 for a single item. You’ll usually need an appraiser to validate the cost of the donation, too.

There’s one thing that you’ll need to take care of before you start filling out tax forms, and even before you start donating: making sure that you’re donating to the right places.

Only qualified organizations are eligible for tax deductions when you donate to them. For example, political organizations aren’t eligible. Just because a group is a non-profit doesn’t mean that they’re automatically eligible.

If you want to make absolutely sure you’re going to be able to claim deductions on your charitable donations, use the IRS’ Tax Exempt Organization Search or a third party like Charity Navigator.

What you can claim deductions on

Okay, so that’s how you claim deductions. But what sorts of things can you actually claim?

Donations basically fall into two categories: cash and physical things.
If you’re giving money to an organization – whether it’s by credit card, PayPal, check, texting, or straight cash – make sure you keep a record of it. This isn’t as cumbersome as it sounds. Bank transactions will be available for pretty much everything except, obviously, cash. In most cases, the organization can also provide a record of your donation.

You don’t need to include this information (unless the donation is over $250 and then you have to get a record of it) but it’s good to have in the off chance that you get audited and need proof of the donations you’re trying to claim. Better safe than sorry!

Getting a deduction amount for cash donations is simple. It’s just the amount you donated. But what do you do when you’re donating things like clothes, furniture, and so on?

You have to use the fair market values of these types of items. The IRS defines fair market value as “the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts.”

In plain English, that basically means that no one feels like they’re getting ripped off. An easy way to figure out the value of an item is to let someone else do it. Organizations like the Salvation Army have done the heavy lifting for you with resources like their Donation Value Guide, which estimates the value of many common items.

Cars fall into a special category when it comes to deductions. We’ve talked about all the ways you can deduct auto costs, and charitable use is a little different.

The simplest scenario is when a charity is going to keep a donated vehicle – like if a soup kitchen is going to keep a van to make food deliveries. In that case, you can deduct the fair market value just like you would with any other item.

If the charity sells the car, you can only write off (deduct) the amount that it was able to get for selling the car, even if the charity got less than the fair market value.

As a side note, you can also use the charitable standard mileage deduction if you use your car for charitable purposes, like volunteering, instead of donating it.

Limits on charitable deductions

You’re supposed to make donations out of the kindness of your heart...and for tax deductions...and also sometimes you get other things, too, like merchandise or tickets to an event.

You can still deduct these donations, but not as much as if you’d just given cash on its own. You can only deduct the amount you pay over the value of the item. For example, if you donate $20 for a charity sandwich, and the actual value of the sandwich is $5, you can only write off $15 rather than $20.

You can also typically only claim deductions on up to 50% of your adjusted gross income (AGI). So if your AGI for the year is $50,000 and you donated $30,000 to an organization, you could only claim $25,000 in deductions. However, you can roll over additional donations for up to five years, which means you could add that extra $5,000 to your deductions for the next tax year.

There are further deduction limits of only 20% or 30% in the case of certain organizations or property donations, so check the IRS’ Tax Exempt Organization Search for guidance on the limits with different organizations.
Another important point is that you can’t deduct contributions to individuals. That means those GoFundMe pages helping someone pay their medical bills won’t qualify.

Finally, if you’re filing a tax return for 2017 or earlier, there is an overall limit to how much you can take in itemized deductions (remember: charitable donations are just one type of itemized deduction). This limit was suspended indefinitely starting with the 2018 tax year. It may return for 2026, but you at least don’t have to worry about it till then.