Deductible Charitable Contributions
The IRS allows deductions for monetary or property donations made to:
- Religious organizations (churches, synagogues, mosques, temples).
- Federal, state, and local governments (for public purposes).
- Nonprofit schools, hospitals, and volunteer fire companies.
- Public parks and recreation facilities.
- Recognized charities such as Salvation Army, Red Cross, United Way, Boy/Girl Scouts.
- Veterans’ organizations.
Charitable Travel
Travel expenses such as transportation (actual expenses or 14 cents per mile), meals, and lodging are deductible if the primary purpose is charity and does not include significant personal recreation or vacation.
Volunteer Out-of-Pocket Expenses
Expenses incurred while performing services for qualified organizations may be deductible. Examples:
- Scout leader uniforms (if not suitable for daily wear).
- Delegate attendance at a church or veterans’ organization convention.
Substantiation Requirements for Noncash Donations
General recordkeeping requirements:
- Name of the charity.
- Date & location of the donation.
- Description of the property.
- Fair market value (FMV) and valuation method.
- Cost basis (if required).
Specific requirements by donation amount:
- Less than $250 – A receipt is not required (e.g., charity drop boxes).
- $250–$500 – A written acknowledgment from the charity is required.
- $501–$5,000 – Must provide how and when the property was acquired and attach an explanation to the tax return.
- Over $5,000 – Requires written appraisal and filing requirements for the charity if disposed of within two years.
Car Donations
Strict IRS rules apply for donations of vehicles, boats, and airplanes exceeding $500.
- Outright sale – Deduction limited to gross sale proceeds, not FMV.
- Transferred to needy individual – Deduction based on FMV if below-market transfer furthers a charitable purpose.
- Significant charity use or improvements – Deduction based on FMV if charity keeps or improves the vehicle.
Donated Goods
As of August 17, 2006, donated clothing and household goods must be at least in "good used condition" to be deductible.
Additional Charitable Deduction Considerations
- Credit Card Rebates – Rebates donated directly to charity are deductible and not taxable income.
- Life-Care Retirement Contributions – Only payments beyond monthly fees without extra benefits are deductible.
- College Game Tickets – Donations for ticket purchasing rights allow 80% deductibility—actual ticket costs are not deductible.
- Tax-Exempt Organizations – IRS Publication 78 lists qualifying charitable organizations at www.irs.gov under "Charities & Nonprofits."
For official IRS guidance, visit www.irs.gov.