From your local non-profit police organization to the National Leukemia Foundation, there are so many organizations that accept donations for a good cause. Many people make charitable donations out of honest desire to help others, while others may do it for personal gain. No matter what your reasons are for donating money to your favorite charity, when it is time to file taxes it is possible to receive a charitable tax deduction under certain qualifying conditions set by the IRS. These deductions may be more beneficial to certain individuals, but it’s something you should remember when contemplating donating your money.
The main condition that applies when looking for charitable tax deduction is that in order to receive one, you must itemize your deductions and then there are limits to the amount deductable in a single year. You should also remember that any donations that you make must be deducted the year they are made. If you are using donations for tax planning, you should investigate further the kinds of organizations whose donations are tax deductible, because not all non-profit agencies are created equal.
Another charitable tax deduction that may be beneficial if you are itemizing your deductions is the donation of non-cash items. Not all donations have to be monetary, as long as the items donated are in useable condition. It’s important to remember that donations made to individuals are not deductible. In order to be deductible, any donations need to be made to a qualifying agency and then disbursed to individuals as they see fit (depending on the organization). Although cash donations and property can both be deducted if they qualify under IRS rules, volunteering your services will not get you any deductions when you file your taxes.
If you make regular donations to your favorite charity, know that your kindness does not necessarily go unnoticed by the government. If you’re willing to follow all IRS rules concerning charitable donations, a charitable tax deduction can be yours, courtesy of the IRS. For those individuals that itemize their deductions every year, or even only once in a while, donating to charity could be worth it financially as well as emotionally. The scope of accepted charities may not be huge, but it’s wide enough that, for some people, itemizing deductions could be the better way to go.
Consult with a tax accountant prior to making donations that you would like deducted. Also remember that not all contribution to charities can be claimed as charitable tax deduction.
IRS.gov – Charitable Contribution Deductions (Publication 78 Help, Part II)