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Tax Deductible Donations

Giving back is the right thing to do. And sure, there's also the benefit of getting a tax deduction. Of course, that’s not why you donate, but when you make a tax deductible donation, your taxable income is lowered, which means you’ll have less tax to pay.

Whether you're thinking of donating cash to the Salvation Army or clothing to a local non-profit, here's what you need to know about charitable tax deductions.

What's Deductible And What's Not?

Tax Deductible Donations

Your donations must go to qualified tax-exempt nonprofit groups that are:

  • Religious
  • Charitable
  • Educational
  • Scientific
  • Have a literary purpose
  • Prevent cruelty to children or animals

Not Deductible as Charitable Donations

  • Amounts paid to civic leagues, social and sports clubs, labor unions, and chambers of commerce
  • Gifts made to most foreign organizations
  • Gifts made to groups that are run for personal profit
  • Gifts made to groups whose purpose is to lobby for law changes
  • Amounts paid in homeowner's association dues
  • Gifts made to individuals
  • Donations given to political groups or candidates running for public office
  • Money paid for a raffle, bingo, or lottery ticket
  • Amounts paid for tuition
  • The value of blood donated to blood banks

What Is My Donation Worth?

Aside from the warm and fuzzy feeling that comes from making a difference in the lives of others ⎼ what is a charitable donation worth on a tax return? In order to claim a charitable deduction on your return, you must itemize your deductions on Form 1040, Schedule A.

Other key points:

  • A contribution to a qualified charity is deductible only in the year it is paid.
  • For cash contributions under $250, you need either a receipt or bank record, such as a cancelled check or credit card statement.
  • If a contribution is made with a credit card, it is deductible when it is charged, not when you pay the bill.
  • The IRS only permits donations of clothing and household items that are in “good condition” or better. Special rules apply to vehicle donations.
  • No deduction is allowed for a separate contribution of $250 or more — unless you have written acknowledgment from the charity showing the date and amount of the contribution and verifying that you did not receive any goods or services.
  • Make sure you receive and save the proper substantiation for every donation. If you are in the 25% bracket, that $1,000 written acknowledgment could be worth up to $250 in savings.

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Tax Tips and Benefits for your First Job from H&R Block

Tax tips and benefits for your first job. Learn more about which expenses you can deduct, the allowances you should choose, and 401k contributions. The tax experts at H&R Block will help you get every single dollar you deserve. To schedule an appointment, file online or to get more details visit hrblock.com.


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