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Income Tax Charitable
Donations & Contributions
Charity
contributions will generally be limited to
50% of your adjusted gross income. You
may deduct your charitable contributions
only if you itemize deductions.
You must
have a receipt from the non-profit charity, or a
bank record for all money donations, and
the non-profit organization must be a
tax-qualified charitable organization
to qualify for deductions.
You can not deduct the value of your time
or services spent on charitable work,
but you can deduct mileage or vehicle
expenses if you use your car for
charitable purposes, cash donations and
property.
Checklist for claiming
charitable deductions:
- Review your
records, noting the method of
donation (cash, property,
securities, etc.), amount of
contribution, organization
contributed to, and other
information for each charitable
contribution you made.
- Itemize your
charitable contributions on Form
1040 Schedule A.
- Enter the total
amount of your cash donations
(including check and credit card
donations) for the current tax year
on line 15.
- Enter total
noncash contributions on line 16.
(If the amount of your noncash
deduction is more than $500, you
must complete and attach Form 8283.)
- Enter any
carry-over deductions (from previous
years) on line 17.
- Add the total of
lines 15 through 17 on line 18 for
your total Gifts to Charity
deduction.
- Make sure to
claim your deductions in the same
year that you made the
contributions.
If you contribute to a charity and
receive something in return, like dinner
or gift, then your deduction is
calculated minus the value of
the goods or services received.
You can deduct the fair market value of
the property, but you must reduce the
value of the donated property by the
amount of ordinary income or short-term
capital gain as if you had sold the
property for that fair market value.
Donating merchandise with a
total value of more than $500 requires
you to
file Form 8283 with your return. You may
need a qualified appraisal for a donated
item or a group of items with a value of
more than $5,000.
Limits on the Deduction. The deduction
for charitable contributions generally
is limited to 50% of your adjusted gross
income (AGI). Contributions in excess of
the limit can be carried forward for up
to 5 years.
The deduction for
appreciated property is limited to 30%
of your AGI if you choose to deduct the
fair market value of the property, or 50%
if you choose to deduct the basis of the
property.
The 30%
limit also applies to donations of
property to some organizations.
A 20% limit applies to
gifts of capital gain property to or for
the use of an organization subject to
the 30% limit. |
