Learn About Tax Deductions for Charitable Donations

The deduction of tax for benevolent contributions is an “itemized deduction”. You can’t itemize as well as claim the standard tax deduction for the filing status. This indicates that claiming a tax deduction for generous contribution doesn’t make much sense.

In place of saving money, you may end up paying more taxes on income. It depends on your clarity on the restrictions and rules as forced by the IRS.

The Impact of the Tax Law 2018

As per the fundraising effectiveness project, charitable donations are seen to drop by 6% and more in the initial three months of 2018.

To make financial sense, it is required that the overall itemized deductions be more than these generous contribution prior to its itemization. Some of the available itemized deductions are local and state property taxes, mortgage interest, and medical expenses.

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Only Give to a Qualified Charitable Organization

If you wish to claim an itemized deduction, then the first and foremost thing is to donate to an eligible charitable organization. If you provide your donations to any unauthorized charitable institution, then your generosity would not count.

The charity to which you give money has to be tax-exempted under section 170(c) or under section 501(c)(3) of the IRC. Following are the contributions for which you are liable to get tax deduction:

  • Churches and other types of religious institutions that fall under section 170(c)
  • Organizations that include the Goodwill, American Red Cross, CARE, and the Salvation Army
  • Tax-exempt academic organizations
  • Tax-exempt hospitals and medical research organizations
  • Government agencies, like a state, if the funds get used for public objectives
  • Nonprofit volunteer fire firms
  • Typical fraternal societies and veterans’ groups
  • Organizations such as federated funds act as a “community chest”. They are supported completely by the public
  • Some of the private establishments that distribute generous contributions they get to private operating foundations and public charities.

Limits on the deductible amount

The IRC limits the contribution amount that you claim as an “itemized tax deduction”. As of 2019, you are eligible to only sixty percent of the adjusted gross income on most of the donations made towards private foundations and public charities.

These rules change if the tangible assets you gift are owned by you for more than a year. In such a case, you claim only a deduction for thirty percent of the present market value. The above rule applies to all those contributions made towards fraternal societies, private foundations, and veterans’ organizations.


I hope the above article has informed you about the prevalent tax deduction rules pertaining to your charitable deduction.

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