You can deduct contributions or gifts you gave to organizations that are religious, charitable, educational, scientific, or literary in purpose. You can also deduct what you gave to organization stat work to prevent cruelty to animals or children. . See Pub. 526 for details.
To verify an organization's charitable status, you can:
- Check with the organization to which you made the donation. The organization should be able to provide you with verification of its charitable status.
- See Pub. 78 for a list of most qualified organizations.
- Call Tax Exempt/Government Entities Customer Account Services at 1-877-829-5500.
Examples of Qualified Charitable Organizations:
- Churches, mosques, synagogues, temples, etc.
- Boy Scouts, Boys and Girls Clubs of America, CARE, Girl Scouts, Goodwill Industries, Red Cross, Salvation Army, United Way, etc.
- Fraternal orders, if the gifts will be used for the purposes listed above
- Veterans' and certain cultural groups
- Nonprofit schools, hospitals, and organizations whose purpose is to find a cure for, or help people who have, arthritis, asthma, birth defects, cancer, cerebral palsy, cystic fibrosis, diabetes, heart disease, hemophilia, mental illness or retardation, multiple sclerosis, muscular dystrophy, tuberculosis, etc.
- Federal, state, and local governments if the gifts are solely for public purposes.
Contributions You Can Deduct
Contributions can be in cash, property, or out-of-pocket expenses you paid to do volunteer work for the kinds of organizations described earlier. If you drove to and from volunteer work, you can take the actual cost of gas and oil or 14 cents a mile. Add parking and tolls to the amount you claim under either method. But do not deduct any amounts that were repaid to you.
Gifts From Which You Benefit
If you made a gift and received a benefit in return, such as food, entertainment, or merchandise, you can generally only deduct the amount that is more than the value of the benefit. But this rule does not apply to certain membership benefits provided in return for an annual payment of $75 or less or to certain items or benefts of token value. For details, see Pub. 526.
Example: You paid $70 to a chairitable organization to attend a fund-raising dinner and the value of the dinner was $40. You can deduct only $30.
Gifts of $250 or More:
You can deduct a gift of $250 or more only if you have a statement from the charitable organization showing the information listed:
- The amount of any money contributed and a description (but not value) of any property donated.
- Whether the organization did or did not give you any goods or services in return for your contribution. If you did receive any goods or services, a description and estimate of he value must be included. If you received only intangible religious benefits (such as admission to a religious ceremony), the organization must state this, but it does not have to describe or value the benefit.
In figuring whether a gift is $250 or more, do not combiine separate donations. For example, if you gave your church $25 each week for a total of $1,300, treat each $25 payment as a separate gift. If you made payments through payroll deductions, treat each deduction from each paycheck as a separate gift.
Limit on the amount you can deduct:
In general, contributions to charitable organizations may be deducted up to 60 percent of adjusted gross income computed without regard to net operating loss carrybacks. Contributions to certain private foundations, veterans organizations, fraternal societies, and cemetery organizations are limited to 30 percent adjusted gross income (computed without regard to net operating loss carrybacks), however. Exempt Organizations Select Check uses deductibility status codes to indicate these limitations.
The 60 percent limitation applies to (1) all public charities (code PC), (2) all private operating foundations (code POF), (3) certain private foundations that distribute the contributions they receive to public charities and private operating foundations within 2-1/2 months following the year receipt, and (4) certain private foundations the contributions to which are pooled in a common fund and the income and corpus of which are paid to public charities.
The 30 percent limitation applies to private foundations (code PF), other than those previously mentioned that qualify for a 50 percent limitation, and to other organizations described in section 170(c) that do not qualify for the 50 percent limitation, such as domestic fraternal societies (code LODGE).
A special limitation applies to certain gifts of long-term capital gain property. A discussion of that special limitation may be found in Publication 526, Income Tax Deduction for Contributions.