Charitable donations: Tax deduction rules for charitable contributions

Are you someone who loves giving back to the community and supporting causes close to your heart? If so, you’ll be glad to know that your generosity may also provide some tax benefits if you qualify.

Charitable giving not only benefits others in need, but as a taxpayer, your charitable contribution can actually count as a tax deduction. Deducting donations you’ve made to a qualified charity on your tax return can reduce your taxable income.

Read on as we walk you through questions such as “What is a charitable donation?”, “Are charitable donations tax-deductible?”, “What kind of donations are tax-deductible?” and how to claim charitable donations on taxes this tax year.

What is a charitable donation?

A charitable donation, or charitable contribution, is a cash or non-cash (property) gift made to a qualified tax-exempt nonprofit organization. The donor doesn’t receive anything of value in return for their charitable donation.

Are charitable donations tax deductible?

In many cases, charitable donations are tax-deductible. When you donate to a qualifying organization, you can deduct the amount from your taxable income if you itemize deductions on your tax return. However, certain conditions and limitations apply, which we’ll cover so you have a clearer picture of what’s permitted by the Internal Revenue Service (IRS).

What are acceptable tax-deductible donations?

Unfortunately, you can’t just write off any expense; the IRS has some guidelines about what qualifies as a tax-deductible donation — and where the donation goes.

First, you can only deduct contributions made to qualified organizations. (That means donations you give directly to needy individuals or a friend’s GoFundMe don’t count.)

Your donations must go to a charitable organization that is one of these:

• Churches, mosques, synagogues, temples, and other religious organizations
• Charity groups
• 501(c)(3) organizations
• Nonprofit schools
• Nonprofit hospitals
• Volunteer fire departments
• Veterans’ and certain cultural groups
• Public parks and recreation facilities

If you’re unsure of an organization’s charitable status, contact them directly or use the IRS Exempt Organizations Lookup Tool.

Here is a short list of what is not deductible as a charitable donation:

• 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

How much of a donation is deductible?

The treatment of charitable donations depends on the tax laws of your specific country. For the purposes of this post, we’ll cover U.S. tax laws. In general, charitable donations offer 100% tax deduction.

Is there a minimum donation for a tax deduction?

There’s no charity tax deduction minimum donation amount required to claim a charitable deduction.

Claiming tax-deductible charitable donations

The IRS allows taxpayers to deduct donations on their federal tax returns, but there are several rules and processes to navigate. Don’t worry — we’ll cover how to claim tax-deductible donations below.

But first: Determine if you should itemize

To claim charitable donations, you’ll need to itemize your deductions on your tax return instead of taking the standard deduction. List your total itemized deductions, including charitable contributions. If that amount exceeds the standard deduction amount for your filing status, you should itemize.

Otherwise, take the standard deduction. View the current standard deduction amounts and determine if itemizing vs. standard deduction makes more sense.

1. See how much your donations may be worth

Part of figuring out if you should itemize is knowing how much your donations may be worth. The limit for cash donations is generally 60% of adjusted gross income (AGI), but you may be limited to 20%, 30%, or 50% depending on the type of contribution and organization your donation goes to.

Deductions can’t exceed 50% of your AGI if they are noncash donations to public charities, colleges, or religious organizations. Within that overall limit, gifts of appreciated property can’t total more than 30% of your AGI. Appreciated property is a property that’s increased in value since you got it.

Donations to certain organizations, like veterans’ groups, can’t be more than:

• 30% of your AGI
• 20% of your AGI on gifts of certain appreciated property

2. Gather appropriate documents to substantiate the charitable donation tax deduction and learn the charitable giving recordkeeping rules

Collect and keep all relevant documentation that supports your charitable contributions. This may include receipts, acknowledgment letters, bank statements, or any other proof of your donations.

Accurate record-keeping is crucial to substantiate donations made to charitable organizations. (Related: Can you claim a charitable donation deduction without a receipt?) The record-keeping requirements for donations differ depending on the amount and type of donation.

Charitable donation tax deduction rules for money donations

Money donations through cash, check, credit or debit card, payroll deduction, or automatic bank withdrawals that go directly to a nonprofit organization are money donations. If you accept something in return for your donation, you can’t write off the full amount. In addition, you don’t have to reduce the amount of your deduction if one of these applies (for 2024):

• Their fair market value (FMV) isn’t more than the lesser of:
  • 2% of the payment
  • $132
• If both statements are true:
  • The payment is at least $66.
  • The only benefits you receive are token items bearing the organization’s logo and the aggregate cost can’t exceed $13.20.
• The organization gives out free, unordered items with a donation request.
• If the annual payment is $75 or less and the donation doesn’t give you certain rights and privileges, like a discounted admission to a concert.

Cash donations of less than $250

A cash donation under $250 to a qualified charitable organization is one of the few charitable donations without a receipt you can take. However, you should be able to provide a bank record (bank statement, credit card statement, canceled check or a payroll deduction record) to claim the tax deduction. Written records, like check registers or personal notations, from the donor aren’t enough proof.

The records should show the:

• Organization’s name
• Date
• Donation amount

For payroll deductions, you can prove your donations if you have:

• Document showing the amount withheld, like a pay stub or W-2 from your employer
• A pledge card or other document that says the organization doesn’t provide goods or services for donations made by payroll deduction.

There is an exception for cash donations made to an unmanned location, like a donation tin.

Cash donations of $250 or more

Cash donations of $250 or more require a receipt from the charitable organization or certain payroll deduction records. The receipt, also called a contemporaneous written acknowledgment must be in writing and include:

• The amount of your cash contribution
• Whether or not the organization provided any goods or services in exchange for the donation
• Description and good faith estimate of the value of goods or services, if any, that the organization provided in return for the contribution
• The date of your cash contribution

If the receipt doesn’t include a date, then the donor must keep a bank record showing the date of the cash contribution. You must have this documentation before you file your tax return.

Charity donation tax deduction rules for non-cash donations

Non-cash donations: Receipt vs. no receipt

Like cash donations, record-keeping depends on the value of the gift. In short: The level of documentation increases with the donation amount. Here are the specific rules about claiming a donation with/out a receipt. Here’s a summary:

Non-cash donations less than $250

The organization must give a receipt showing:

• Organization’s name and address
• Date and location of donation
• Reasonably detailed description of the property donated

However, you don’t have to get a receipt if it’s impossible or impractical. (Like if you donate property at an unattended drop-off site.) In this case, keep a written record for the donation, including the:

• Organization’s name and address
• Date and location of donation
• Reasonably detailed description of the property donated
• Fair market value (FMV) of the donation when you donated it, plus an explanation of how you calculated the FMV
• Cost or other basis you had in the donation if you must reduce the FMV by appreciation, plus how you figured it

You might be contributing less than the entire interest in the donation. If this is the case, show the amount you’re claiming as a deduction for the year from the donation. If the remaining interest has been donated, you must provide details of each donation.

Non-cash donations at least $250 but less than $500

Obtain and keep a written receipt or acknowledgment from the organization for donations between $250 and $500 by your tax filing date or the due date of the tax return, including extensions.

Your receipt must include a:

• Description of donation
• Indication of goods or services you received, if any, other than certain token items or membership benefits
• Description and good faith estimate of the value of goods or services you received

Request a separate statement for each donation given. For more guidance, see IRS Publication 1771: Charitable Contributions.

Non-cash donations more than $500 but less than $5,000

You must have a written acknowledgment and record, which should include several details like:

• How you got the donated property (purchase, gift, or inheritance)
• When you got it
• The cost or other basis and adjustments to the basis for property owned for less than 12 months. (Include the cost or other basis of property held 12 months or more.)

Non-cash donations of $5,000 or more

You can take the charity donation tax deduction for your non-cash single charitable donation for one item or a group of similar items is more than $5,000 if the organization you donated to gives written acknowledgement and show certain records. In some cases, you may need an appraisal. Appraisals are required for:

• A single donated item or a group of similar items is more than $5,000.
• Clothing or household items valued at more than $500 that aren’t in good condition (vintage clothing, for example).
• Stock not traded publicly is $5,000 or more (Publicly traded securities don’t require a written appraisal)

You’ll owe a tax penalty if the donated property’s value is significantly overstated. The cost of the required appraisal can’t be part of your charitable donation.

To learn more, see Appraisals in IRS Publication 561: Determining the Value of Donated Property.

3. Determine if you need to complete and file Form 8283 for noncash charitable contributions

If you donated a total (aggregate) amount of $500 or more in noncash donated property to charitable organizations or claim a deduction for donated property, use  Form 8283 to report information about tax-deductible donations. As you complete the form, provide information about the donated property, including its description, cost or adjusted basis, when and how you acquired it, and who you gave it to. Additionally, the charitable organization receiving the donation must provide acknowledgment of the donation on Part IV of the form.

4. Complete and file Schedule A along with your individual tax return

As mentioned above, to claim a charitable donation, you need to itemize your deductions using Form 1040, Schedule A as part of your tax preparation. Schedule A reports your itemized deductions, including charitable contributions. Fill out this form carefully to ensure accurate information about your donations. Cash donations are reported on line 11, and non-cash donations are reported on line 12 of Schedule A.

Charitable contribution deduction: Special considerations

Wait, there’s a bit more, so bear with us! There are special considerations for the charitable contribution deduction for appreciated property, item donations, donated vehicles, and out-of-pocket expenses accrued while donating or hosting a foster or exchange student. Read on if this section applies to you.

Appreciated property

When you donate appreciated property like art, antiques, real estate, and antiques, the rules get more complicated. Your deduction depends partly on if the property you donated is capital gain or ordinary income property.

Item donations

Donating property can earn you a deduction just as donating money can. Property donations are usually used clothing and household goods. Your tax write-off for these is the FMV of the property at the time you give it. It’s often difficult to determine the FMV of used items. To learn more, see Publication 561: Determining the Value of Donated Property.

Items donated must be in working condition to qualify for a deduction.

Donated vehicles

Special rules apply when you donate a vehicle to a charity. If the charity sells the vehicle, it must send you a Form 1098-C within 30 days of the sale. This will tell you the sales price and set the amount you can deduct.

However, there’s one exception. If the claimed car’s value is $500 or less, you can deduct the value of the donated vehicle. Deduct the vehicle’s FMV at the time of the donation if the charity:

• Fixes up the car and sells it
• Gives it to a needy person
• Makes substantial improvements to the car
• Uses it in its charitable efforts

Out-of-pocket expenses

If you do volunteer work for a qualified organization, you can deduct the following at 14 cents a mile (for 2024):

• Mileage expenses if you use your car while doing volunteer work for a hospital or school
• Mileage expenses for miles you drive to and from a charity to drop off donated goods
• Parking fees, tolls, or public transportation expenses while doing volunteer work or dropping off donated goods
• The cost and care of a special uniform you must wear while performing these services

Unfortunately, you can’t write off the value of the services or the time you donate.

Foster children

If you have foster children, you can deduct some of the costs of providing for them as a charitable donation. You can deduct the cost, which is more than the reimbursement you receive. You can only do this if you aren’t in the trade or business of providing foster care.

Foreign exchange students

You can also take a charitable deduction if a foreign exchange student lives in your home and is enrolled in a qualified program. To take this deduction, the student can be American or foreign and must be a full-time elementary or high school student.

You can deduct up to $50 per month for what you spend for the student, including the cost of books, tuition, food, clothing, and entertainment. Count each month the student lives with you for 15 or more days to determine how many $50 allotments you can claim.

Get help with claiming a tax deduction for charitable contributions

Need more charitable giving tax guidance? We don’t blame you. The charitable donation tax nuances are nearly endless.

Let us help you with your tax preparation! Whether you make an appointment with one of our knowledgeable tax pros or choose one of our online tax filing products, you can count on H&R Block.