Below is a step-by-step guide.
Step 1: Open Schedule A
In TaxWise, open the client’s tax return.
Go to the Forms List and select Schedule A – Itemized Deductions.
Scroll to the Gifts to Charity section.
Step 2: Enter Charitable Contributions
1. Cash Contributions (Line 11)
Enter cash or check donations made to qualified charities.
This includes church donations, online donations, and payments made via credit card.
✅ Example: If the taxpayer donated $1,000 to the Red Cross, enter $1,000 on Line 11.
2. Non-Cash Contributions (Line 12)
Enter donations of property (clothing, furniture, stocks, etc.).
If total non-cash donations exceed $500, complete Form 8283.
For vehicles, boats, or airplanes, enter details from Form 1098-C.
✅ Example: If the taxpayer donated clothing worth $300, enter $300 on Line 12.
🔹 Form 8283 Required?
Non-Cash Donation Amount | Action Required |
$500 or less | Enter on Schedule A, Line 12 |
Over $500 | Complete Form 8283 |
Over $5,000 | Appraisal & Form 8283, Section B |
3. Carryover Contributions (Line 13)
If the taxpayer couldn’t deduct all donations last year due to AGI limits, enter the carryover amount here.
Step 3: Verify Deduction Limits
Most charitable contributions are limited to 60% of AGI.
Certain donations (e.g., gifts to private foundations) are limited to 30% or 20% of AGI.
If contributions exceed these limits, the excess is carried forward for up to 5 years.
Step 4: Review & File
Ensure all donations have receipts (IRS may request proof).
Verify that deductions correctly flow to Form 1040, Line 12.
E-file or print the return when ready.
Pro Tips
📌 Standard Deduction Consideration – Only enter donations if itemized deductions exceed the standard deduction.
📌 Keep Records – Donations over $250 require written acknowledgment from the charity.
📌 Use IRS Tax Exempt Organization Search to verify if a charity is qualified (IRS Tool).