Donations As a Tax Write-Off
The Internal Revenue Service allows you to deduct your charitable donations from your taxable income. The deduction for donations is an itemized deduction, which means in order to claim it you must give up the standard deduction. To determine whether it is worthwhile to itemize your deductions, take the sum of all of your itemized deductions. If the total is greater than your itemized deductions, you should itemize.
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How Much to Deduct
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You can calculate the value of your tax deduction by subtracting the tangible value of anything you receive in return, if anything, from the value of your contribution. If your donation is rewarded by the right to purchase tickets to athletic events, you can deduct 80 percent of the value of the contribution. For example, if your $1,000 donation to your university allows you to buy a ticket to the homecoming football game, you can deduct $800. However, if you are given tickets, you must subtract the value of the tickets from the donation.
Limits
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The amount of your deduction for charitable donations is limited based on your adjusted gross income. Your monetary contributions can amount to up to 50 percent of your adjusted gross income. Your property and goods donations can be up to 30 percent of your adjusted gross income. Your donations of property that would otherwise be subject to capital gains taxes can only amount to 20 percent of your adjusted gross income. You can carry over any excess amounts for up to five years after the date of the donation. For example, if you donated a car that was worth $14,000 and your adjusted gross income was $40,000, you could deduct $12,000 in the year you make the donation and $2,000 the following year.
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Documentation
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The IRS requires you to keep records of your charitable donations. For any donation over $250 that you claim you must have a receipt, and for any donation of $5,000 you must have it officially appraised.
When to Claim the Deduction
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Charitable donations are deductible in the year that you make them. If you mail in a check, the donation is deductible in the year the check is mailed rather than in the year the check is cashed. For example, if you mail a check on Dec. 30, 2009, and the check is cashed on Jan. 7, 2010, the deduction should be taken in 2009.
Mileage
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If you have to drive to donate your time to charity work or drive your vehicle as part of volunteer work, you can deduct mileage expenses as part of your itemized deduction. For 2009, the mileage rate for charity work is $0.14 per mile.
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