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Donation Rules

Where to Claim the Charity Deduction

You claim your tax deduction on Form 1040, Schedule A (PDF).

Rules for Claiming the Charitable Contribution Deduction

Your gift of cash or property must meet certain criteria in order to be tax-deductible.
  • You must actually donate cash or property. A pledge or promise to donate is not deductible until you actually pay.
  • You must contribute to a qualified tax-exempt organization. Charities will let you know if they have received their 501(c)(3) tax-exempt status. Some organizations are not required to obtain 501(c)(3) status from the IRS. These include churches and other religious organizations.
  • You must be able to itemize. Giving to charity is a great tax planning strategy, but it only works for people who are eligible to itemize their deductions.
  • You must meet record keeping requirements. This includes saving canceled checks, acknowledgment letters from the charity, and appraisals for donated property.

Keeping Records of Your Charity

Taxpayers are required to keep excellent records of their charitable contributions. Under the Pension Protection Act, you must keep written records of all cash donations. Donations of $250 or more will not be allowed as a tax deduction unless you have supporting documentation. Your records must indicate the name of the charitable organization, the date of your contribution, and the amount your contribution.

Non-Cash Contributions of Property

Contributions of property (other than cash) are subject to strict record keeping and substantiation rules. You must be able to substantiate the fair market value of the goods or property you donated, plus keep any written acknowledgments you receive from the charity.

Fair Market Value of Contributed Property
You must make an assessment of the fair market value of the property you contribute.

Non-Cash Contributions Totalling More Than $500
You must attach IRS Form 8283 if your total non-cash contributions exceeds $500.

Car Contributions: Must Have Written Acknowledgement
If you contribute a car, truck, boat, airplane, or other vehicle, and the vehicle is worth more than $500, you must received a written acknowledgement from the non-profit before you can claim a tax deduction.

Non-Cash Contributions over $5,000: Must Have Written Appraisal
If you contribute property worth more than $5,000, you must obtain a written appraisal of the property's fair market value.

Limits on the Charitable Contribution Deduction

Your charitable contribution tax deduction may be limited. There are limits specific to charitable contributions, and there are general limits on itemized deductions.

50%, 30%, and 20% Limits on Charitable Contributions

  • Generally, you can deduct cash contributions in full up to 50% of your adjusted gross income.
  • Generally, you can deduct property contributions in full up to 30% of your adjusted gross income.
  • Generally, you can deduct contributions of appreciated capital gains assets in full up to 20% of your adjusted gross income.
Charitable contributions in excess of these limits can be carried over to the following tax year. The excess contributions can be carried over for a maximum of five years.

Not Tax Deductible

Contributions are not tax deductible if given to any of the following:
  • Political parties, political campaigns, or political action committees.
  • Contributions given to individual people.
  • Fees or dues paid to professional associations.
  • Contributions to labor unions, chambers of commerce, or business associations.
  • Contributions to for-profit schools and hospitals.
  • Contributions to foreign governments.
  • Fines or penalties paid to local or state governments.
  • The value of your time for services rendered to a non-profit.

IRS Resources:

You should keep all documents regarding donations to charity. This includes both cash and non-cash contributions. Under the Pension Protection Act, taxpayers are required have receipts from the charity, a canceled check, or credit card statement to prove their donation. No tax deduction will be allowed if the taxpayer cannot provide any supporting documentation. You will not need to mail in the receipts with their tax return. Instead, keep receipts and other documentation with your copy of the tax return in the event of an IRS audit.

What Records You Need to Keep

For cash contributions under $250, be sure to keep the following records:

  • Canceled check, bank statement, or credit card statement showing the amount paid, date paid, and the name of the charity to which you gave money;
  • Written receipts or acknowledgment letters from the charity showing the date and the amount of your contribution; and
  • Any other documentation or records that would establish the date and the amount you contributed.

For cash contributions of $250 or more, you must have a written acknowledgment from the charity before you can deduct the contribution on your tax return. Be sure to keep all acknowledgment letters from charities with your tax records. Acknowledgment letters must state the following:

  • Amount of cash you donated,
  • Whether the charity provided any goods or services in exchange for your donation, and
  • Description and good faith estimate of the value of goods or services that the charity provided to you.

Keeping Records of Non-Cash Contributions

For donations of property, you must keep records to establish what you donated, its condition, its fair market value, and the amount of your tax deduction. Your records must indicate:

  • Name and address of the charity,
  • Date and location of the contribution,
  • Description of the property donated,
  • Fair market value of the property and how you figured the value, and
  • Amount claimed as a tax deduction.

For non-cash contributions worth $250 to $500, you will also need a written acknowledgment letter from the charity to substantiate your deduction.

For non-cash contributions worth $500 to $5,000, you will need to keep records that establish:

  • How you acquired the property (such as purchase or inheritance)
  • Date you acquired the property
  • Your cost or adjusted basis in the property

For non-cash contributions of $5,000 or more, you will need a written appraisal from a qualified appraiser to substantiate the value of your deduction.

Donated items, such as cars, clothing, and household goods, must be in good condition. "The new law does not define 'good condition,'" according to a tax law briefing from CCH. No tax deduction is allowed for items in less than good condition. You should keep a detailed list of the non-cash goods you donated to charity, along with a description of their condition.