Due to modifications to tax laws, such as the CARES Act, the ways to claim charitable deductions on your tax returns can change frequently. For example, as of the 2021 tax year, you can claim a charitable contribution as a tax deduction even if you take the standard deduction. A single filer can claim up to $300, while a couple can claim $600.
While most of the basics will stay the same, you might run into a few variations in the law regarding donations, so it's a good idea to work with a tax professional each year before you make a donation – not just after.
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Is It a Charity?
Not all nonprofits are charities. Almost anyone can register a nonprofit corporation at the state level. That doesn't mean it's a tax-exempt charity.
For example, the U.S. High School Tennis Association, Inc. is a registered nonprofit corporation in Georgia and has a federal tax ID number. However, if you make a donation, you can't write it off your taxes because the USHSTA is not a federally tax-exempt 501(c) organization.
Even many 501(c) nonprofits don't qualify for tax write-offs, most notably trade associations that help professionals, but not primarily the public. For example, the Professional Tennis Registry is a 501(c)(6) trade association for tennis teachers. If you donate money to the PTR, you don't get a write-off. That's why the PTR set up the PTR Foundation, a 501(c)(3) charity. If you donate to the PTRF, you can take a tax deduction.
Make sure that any organization you are considering donating to provides you the opportunity to write off your donation, if that's important to you.
General vs. Specific Donation
If you want to make a donation to a qualifying organization and qualify for a tax deduction, you need to be careful how you make your donation. If you tell the organization how to spend the money, it's not a donation or contribution – in effect, you're hiring them to do work for you. For example, if you donate money to the PTR Foundation and tell them the money must be used to start a tennis program for teenage girls or to build four tennis courts at your former high school, you might not be able to claim the deduction.
If you make a donation to the PTRF's general fund and let them decide how to spend the money, that qualifies. You can let an organization know your specific interest in their work, and they understand that you probably won't donate again if they don't spend your money in that area, but it's a good idea to work with a tax professional to make sure the money you give to a nonprofit qualifies as a donation, not a payment for services.
Additionally, if you attend a charity ball with a dinner or a charity golf tournament, you can only deduct the portion of your payment that is a contribution. For example, if you pay $100 to play in a golf tournament, you're getting something valuable (greens and cart fees), and won't be able to write off the entire $100. The tournament organizer should be able to tell you how much of the $100 you can deduct.
Get a Receipt
Even if you make a small donation to a qualifying nonprofit's general fund, ask for a receipt, which you can use to prove that you made the donation if you're ever audited by the IRS. Charities are required to give receipts when they get specific amounts, but those amounts can change over the years (see IRS Publication 1771 to learn the latest requirement). Most nonprofits send you a thank you letter, but if you're working with a small local nonprofit, like a youth sports league or soup kitchen, you might have to ask for a receipt
To improve your paper trail, write a note on the memo line of any check you write stating that the money is a donation. Keep bank and credit card statements to prove that you made a payment to a nonprofit.
Filing Your Taxes
When you claim a charitable deduction and itemize on your taxes, you'll use Schedule A on a 1040 form. You'll need to provide the amount of money you contributed (or the value of goods you donated), the name of the organization and the date. A receipt or thank you letter isn't enough to provide proof of a donation – your friend who works at the charity could send a bogus letter, so you'll need proof of payment, explains H&R Block.
H&R Block provides a detailed list of scenarios for making, proving and claiming charitable deductions at this link. This includes how to record cash and non-cash donations, how to get appraisals on donated goods, information on out-of-pocket expenses, how much of your income you can donate and claim and other details.