Ten Tips for Deducting Charitable Contributions
March 26, 2010 – Special Edition TT-2010-60
When preparing to file your federal tax return, don't forget your contributions to charitable organizations. If you made qualified donations last year, you may be able to take a tax deduction if you itemize on IRS Form 1040, Schedule A.
The IRS has put together the following 10 tips to help ensure your contributions pay off on your tax return.
- Contributions must be made to qualified organizations to be deductible. You cannot deduct contributions made to specific individuals, political organizations and candidates.
- You cannot deduct the value of your time or services. Nor can you deduct the cost of raffles, bingo or other games of chance.
- If your contributions entitle you to merchandise, goods or services, including admission to a charity ball, banquet, theatrical performance or sporting event, you can deduct only the amount that exceeds the fair market value of the benefit received.
- Donations of stock or other property are usually valued at the fair market value of the property. Special rules apply to donation of vehicles.
- Clothing and household items donated must generally be in good used condition or better to be deductible.
- Regardless of the amount, to deduct a contribution of cash, check, or other monetary gift, you must maintain a bank record, payroll deduction records or a written communication from the organization containing the name of the organization, the date of the contribution and amount of the contribution. For donations by text message, a telephone bill will meet the record-keeping requirement if it shows the name of the organization receiving your donation, the date of the contribution, and the amount given.
- To claim a deduction for contributions of cash or property equaling $250 or more you must have a bank record, payroll deduction records or a written acknowledgment from the qualified organization showing the amount of the cash and a description of any property contributed, and whether the organization provided any goods or services in exchange for the gift. One document may satisfy both the written communication requirement for monetary gifts and the written acknowledgement requirement for all contributions of $250 or more.
- If your total deduction for all noncash contributions for the year is over $500, you must complete and attach IRS Form 8283, Noncash Charitable Contributions, to your return.
- Taxpayers donating an item or a group of similar items valued at more than $5,000 must also complete Section B of Form 8283, which requires an appraisal by a qualified appraiser.
- To deduct a charitable contribution, you must file Form 1040 and itemize deductions on Schedule A.
For more information on charitable contributions, refer to Form 8283 and its instructions, as well as Publication 526, Charitable Contributions. For information on determining value, refer to Publication 561, Determining the Value of Donated Property. These forms and publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Both TaxACT Free Federal and Deluxe editions include Schedule A and Form 8283 and will guide you through deducting charitable contributions.
To help you maximize the value of your non-cash charitable contributions, Donation Assistant® in TaxACT Deluxe provides audit-backed values for more than 700 commonly donated items. Watch a video demonstration of Donation Assistant.
After starting your TaxACT return, you can navigate to the section of the federal interview that covers charitable contributions by clicking on the "Federal Q&A" tab, selecting the "Itemized or Standard Deductions" link and then "Charitable contributions".
- Search for Charities or download Publication 78, Cumulative List of Organizations
- Publication 526, Charitable Contributions (PDF 178K)
- Publication 561, Determining the Value of Donated Property (PDF 101K)
- Instructions for Form 8283, Noncash Charitable Contributions (PDF)