Charitable Contributions: What Can You Deduct On Your Tax Return?

During the holiday season many people make donations to benefit charitable organizations. It's great to help others, and your contributions make a difference in people's lives. There is another benefit . . . you may be able to claim a deduction for the donation on your federal tax return.

Here are five facts about charitable donations:

1. In order to qualify for a deduction, you must donate to a 'qualified' charity. Gifts to individuals, political organizations, or candidates are not deductible. Use Exempt Organizations Select Check to check the status of a charity to see if it qualifies.

2. You must itemize deductions and file Form 1040, Schedule A, with your tax return in order to claim the deduction.

3. If you receive something in return for your donation, such as merchandise, meals, or event tickets, you can only deduct the amount of the donation that is more than the fair market value of the item you received.

4. For donations of property instead of cash, you can only deduct the fair market value of the donated item. Fair market value is generally the price you would get if you sold the item on the open market. If you donate used clothing and household items, those items generally must be in good condition. Special rules apply to certain types of property donations, such as cars and boats.

5. For donations of $250 or more in cash or goods, you must have a written receipt from the charity. The statement must show: • The amount of the donation. • A description of any property given. • Whether you received any goods or services in exchange for your gift, and, if so, must provide a description and good faith estimate of the value of those goods or services.

For more information on charitable contributions deductions, visit Tax Topic No. 506 – Charitable Contributions.


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