Charitable Contributions | Frequently Asked Questions
From donating items to volunteering time to giving cash to those in need, there are many ways you can support causes you care about. Charitable acts not only help those around you, but they can also provide you with some tax benefits.
The last couple of years have seen many changes, but as we get back to normal, many special tax benefits for 2020 and 2021 aren’t available in 2022.
Who can claim Charitable Contribution Deductions?
The ability and the amount you can deduct depends on if you take the standard or itemized deduction when filing your taxes.
Standard Deduction and Charitable Contributions
Taxpayers who take the standard deduction cannot claim charitable contributions on their tax return. In 2020 and 2021, those taking the standard deduction were able to take advantage of temporary tax benefits that allowed individuals to deduct up to $300 in charitable contributions, however, those benefits ended in 2022.
Itemized Deductions and Charitable Contributions
Taxpayers who itemize can claim charitable contributions up to 20% to 60% of their adjusted gross income (AGI) depending on the type of contribution and the charitable organization. In 2020 and 2021, those who itemized were able to take advantage of a temporary tax benefit that allowed individuals to deduct charitable contributions up to 100% of their AGI, however, those benefits ended in 2022.
What qualifies as a Charitable Contribution?
Generally, donations to a 501(c)3 organization can be claimed as a deduction on your tax return. According to the IRS Tax Exempt Organization tool, there are currently 1,195 eligible charities and non-profits to donate to in Bellingham. You can also use the tool to determine if a charity qualifies as a charitable organization for tax purposes.
While you can’t donate the value of your time or services, certain out-of-pocket expenses paid when volunteering or giving services to a qualified organization may qualify for a deduction. To claim the deduction, the out-of-pocket expense must be:
Unreimbursed
Directly connected to the services
An expense you had only because of the services you gave
Not a personal, living, or family expense
What charitable contributions can’t you deduct?
The following cannot be deducted as a charitable contribution:
Contributions to a specific individual
Contributions to a nonqualified organization
Most contributions to crowdfunding campaigns (for example, GoFundMe donations)
The part of a contribution from which you receive a benefit
The value of your time or services
Personal expenses
Qualified charitable distributions from an individual retirement arrangement (IRA)
Appraisal fees
Certain contributions to donor-advised funds
Certain contributions of partial interests in property
To learn more about which contributions you can and cannot deduct, check out IRS Publication 526, Charitable Contributions.
How do you claim a Charitable Contribution Deduction?
Charitable Contributions are claimed on Schedule A of your 1040 form. You will need to determine the total donations made by cash or check and the total donations that weren’t made by cash or check.
When you donate to a qualified charity, keep records that show the organization, date, and amount of your donation. There are steep penalties if the IRS audits you and you cannot provide substantial records to back up your deductions.
Contributions of $250 or more
For contributions of $250 or more, you will need a written acknowledgment from the charitable organization that shows the amount of money contributed, the description of the property donated, and whether the organization did or did not give you any goods or services in return for your contribution.
Have more questions about Charitable Contributions?
If you have questions about whether a donation is tax deductible or need help filing a tax return with charitable contributions, our tax preparers here at Northside Tax Service are happy to help! Give us a call at (360) 922-0235 to speak with one of our experienced tax preparers or schedule an appointment.
Disclaimer: This material is prepared for informational purposes only, and is not tax advice. Please speak with a tax professional or view the resources below to see how this information may apply to you.
