Charitable Contribution Deductions

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On your Schedule A, you have the ability to itemize and deduct contributions that you have made to various charities during the tax year. There are some specific rules that we have to follow when listing these contributions as deductions.

Ten Tips for Deducting Charitable Contributions

1. Contributions must be made to qualified organizations to be deductible. You cannot deduct contributions made to specific individuals or to political organizations and candidates.
2. You cannot deduct the value of your time or services. Nor can you deduct the cost of raffles, bingo or other games of chance.
3. If your contributions entitle you to merchandise, goods or services, including admission to a charity ball, banquet, theatrical performance or sporting event, you can deduct only the amount that exceeds the fair market value of the benefit received. Usually your charitable organization will itemize the FMV of the benefit received on your gift receipt.
4. Donations of stock or other property are usually valued at the fair market value of the property. Special rules apply to donation of vehicles.
5. Clothing and household items donated must generally be in good used condition or better to be deductible. The value of these items is generally far less than what you originally paid for the item. Imagine if the item were for sale on a garage sale to value it.
6. Regardless of the amount, to deduct a contribution of cash, check, or other monetary gift, you must maintain a bank record, payroll deduction records or a written communication from the organization containing the name of the organization, the date of the contribution and amount of the contribution. For donations by text message, a telephone bill will meet the record-keeping requirement if it shows the name of the organization receiving your donation, the date of the contribution, and the amount given. Often the charitable organization will send you an electronic receipt for such donations.
7. To claim a deduction for contributions of cash or property equaling $250 or more you must have a bank record, payroll deduction records or a written acknowledgment from the qualified organization showing the amount of the cash and a description of any property contributed, and whether the organization provided any goods or services in exchange for the gift. One document may satisfy both the written communication requirement for monetary gifts and the written acknowledgment requirement for all contributions of $250 or more.
8. If your total deduction for all noncash contributions (merchandise or other property) for the year is over $500, you must complete and attach IRS Form 8283, Noncash Charitable Contributions, to your return.
9. Taxpayers donating an item or a group of similar items valued at more than $5,000 must also complete Section B of Form 8283, which requires an appraisal by a qualified appraiser.
10. To deduct a charitable contribution, you must file Form 1040 and itemize deductions on Schedule A.

For more information on charitable contributions, refer to Form 8283 and its instructions, as well as Publication 526, Charitable Contributions.  For information on determining value, refer to Publication 561, Determining the Value of Donated Property.