The information in this article is up to date for tax year 2023 (returns filed in 2024).
Giving isn’t just good for your soul–it can actually be good for your taxes. If you donated money in 2023, you may be able to deduct those contributions from your tax bill under the charitable contributions deduction.
Here’s how it works.
Is charitable giving tax deductible?
Yes! Under the charitable donations deduction, charitable donations to qualified organizations (defined by the IRS) can be deducted from your tax bill.
See: Tax Credits vs Deductions: What’s the Difference?
What is the charitable contributions deduction?
The charitable contributions deduction reduces your taxable income by letting you deduct qualified donations of cash or property from your tax bill.
Typically, you can deduct charitable donations of up to 60% of your adjusted gross income (in some cases, 20%, 30%, or 50% limits may apply).
What is a charitable contribution?
A charitable contribution is a gift of cash or property to a qualified organization without anything in return.
If you do receive a benefit from making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you receive.
What organizations qualify for the charitable tax deduction?
To qualify for the charitable tax deduction, your contributions generally must go to tax-exempt organizations with 501(c)(3) status.
Examples of qualified organizations include:
- Churches, synagogues, temples, mosques, and other religious organizations
- Federal, state, and local governments, if your contribution is solely for public purposes (for example, a gift to reduce the public debt or maintain a public park)
- Nonprofit schools and hospitals
- The Salvation Army, American Red Cross, CARE, Goodwill Industries, United Way, Scouts BSA, Girl Scouts of America, Boys and Girls Clubs of America, etc.
- War veterans’ groups
Tax Tip: Not sure if an organization qualifies? Use the IRS Tax Exempt Organization Search tool to verify its eligibility.
Contributions you can’t deduct
Not all charitable giving is tax deductible. Here are contributions you cannot deduct on your taxes:
- A contribution to a specific individual
- A contribution to a nonqualified organization
- The part of a contribution from which you receive or expect to receive a benefit
- The value of your time or services
- Your personal expenses
- A qualified charitable distribution from an individual retirement arrangement (IRA)
- Appraisal fees
- Certain contributions to donor-advised funds
- Certain contributions of partial interests in property
- Certain conservation contributions by pass-through entities
You can also claim certain expenses, including:
- Expenses paid for a student living with you, sponsored by a qualified organization
- Out-of-pocket expenses when you serve a qualified organization as a volunteer
Note: You can’t deduct the value of your time when volunteering, but expenses incurred while volunteering may qualify.
How to claim the charitable contributions deduction
1. Make a donation to a qualified organization.
You can only count charitable giving that goes towards a qualified organization. Gifts or donations to friends, for example, are not tax deductible.
2. Document your donations.
Keep records of all your charitable contributions. For monetary donations under $250, your bank statement, credit card statement, or receipt from the organization is all you need.
The IRS requires a letter of acknowledgment from the charity for donations worth more than $250. This letter must be received by the date you file your taxes for it to qualify on your tax return.
3. Include all contributions made in the calendar year.
For tax year 2023, you can deduct all qualifying donations given by December 31, 2023.
If you paid by check, the date of donation is the day the check was mailed (not when it was received). So, if your check is postmarked by December 31, it counts toward your tax deduction, even if the organization didn’t receive it or cash it until 2024.
If you paid by credit card, the date of donation is the day the card was charged/processed (not when you paid the credit card bill).
4. Itemize your deductions on Schedule A.
To claim the charitable contributions deduction, you must itemize all your deductions on Schedule A.
Itemizing is a more time-consuming process than taking the standard deduction, so keep an accurate tally of your total contribution amount. If the standard deduction is worth more than the itemized deduction, you may be better off simply taking the standard deduction. Of course, if you take the standard deduction, you will no longer be able to apply the charitable contributions deduction to your tax return.
The standard deduction amounts for 2023 are:
- $27,700 – Married Filing Jointly or Qualifying Surviving Spouse
- $20,800 – Head of Household
- $13,850 – Single or Married Filing Separately
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The articles and content published on this blog are provided for informational purposes only. The information presented is not intended to be, and should not be taken as, legal, financial, or professional advice. Readers are advised to seek appropriate professional guidance and conduct their own due diligence before making any decisions based on the information provided.
