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Tax implications of charitable giving
Tax implications of charitable giving
Updated over a week ago
  • Can I deduct the full price of the ticket for a charitable event?

    • Not quite, but close. Charitable groups often sponsor events in order to raise money. You can deduct the cost of tickets to these events, but the amount shown on the ticket you buy isn't necessarily the amount you can deduct. Suppose you pay $50 for a special film screening designed to benefit a cause you support. If you can see that movie somewhere else for $8, you've made a contribution of $42. If the 'regular price' is not indicated on the ticket or anywhere else, just note the normal price for similar events or activities in your area and reduce your donation by that amount.

  • Can I get a deduction for donating my car to charity?

    • If you donate your car to a non-profit organization with tax-exempt status, then you can take a deduction. But valuing your deduction can be tricky. For vehicles worth more than $500, your deduction is limited to the amount the car actually sold for at auction and the IRS requires a written receipt from the charity detailing the exact amount the car garnered. Fair market value can be used to determine your deduction only in the following situations: the car is worth less than $500, the charity keeps and uses the car, the charity improves the car before selling it, or if the car is sold at a discounted price to a person with a low income.

      The IRS scrutinizes these types of deductions so we encourage donors to be cautious when valuing vehicle donations. We suggest you read our Guide To Donating Your Car.

  • Can I deduct all my giving?

    • Make sure your generosity during the coming year pays off as much as possible by documenting all of your deductions. The big contributions which translate to the big deductions are hard to overlook - what you give your church or synagogue or alma mater. But little expenses from your good-deed-doing can also mount up. Whether it's out-of-pocket contributions to a bell-ringer or what you pay for supplies while you're doing charitable work, if the money is going to help a qualified charitable organization (not an individual), you get a deduction. If you drive your own car while doing volunteer work, you can deduct 14 cents a mile. If your charitable work takes you out of town overnight as the official delegate to a church meeting, for example, you can deduct the cost of transportation and the cost of your meals and lodging.

      Starting in 2007, the IRS requires written documentation to substantiate deductions for all monetary donations - including cash. In case of an audit, you must have a canceled check, credit card statement or a written acknowledgement from the charity (showing the charity's name, the date of the donation and the amount given). You will no longer be able to deduct those few dollars you dropped in a charity's collection bucket without a receipt from the charity to back up your claim.

  • How do I establish the market value of used items I donate to charity?

    • When you give used clothes or other items to charity, the Internal Revenue Service will allow you to deduct the fair market value of the items on your income tax return. The IRS isn't in the appraisal business, so it can't tell you exactly how much each item you donate is worth. Instead, the agency says the fair market value of used clothes, furniture and similar items is the amount people would pay for the items at thrift shops or used clothing stores. You can determine the size of the deduction to take by checking with local stores.

  • Can we deduct the cost of old furniture we donate to a local homeless shelter?

    • If you donate personal possessions -- a couch, refrigerator, clothes or the like -- to a bona fide charity, you can take a tax deduction for the property's fair market value. To protect yourself in case you are eventually audited, ask for an itemized receipt for the items regardless of whether they are worth $25 or $250. Keep in mind that the IRS only permits deductions for donations of clothing and household items that are in "good used condition or better." And the IRS requires a qualified appraisal to be submitted with the tax return for any single clothing or household item that is not in good used condition or better and for which you deduct more than $500.

      We suggest you read our Guide to Donating Noncash Items.

  • Can I deduct donations made from an IRA?

    • No, you can not claim a deduction for donations made from an IRA.

      However, taxpayers who are at least 70½ can directly contribute up to $100,000 from a traditional or Roth IRA to a public charity without having to count the gift as taxable income.

  • What's the deadline for making a donation if I want to ensure that I can deduct it from my taxes?

    • Contributions are deductible in the year made. Thus, donations charged to a credit card before the end of 2023 count for 2023. This is true even if the credit card bill isn't paid until 2024. Also, checks count for 2023 as long as they are mailed in 2023 and clear, shortly thereafter.

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