About Charitable Donation Tax Deductions
The IRS allows individuals and organizations to claim deductions on their taxes based on the amount that the individual or organization donated. However, the IRS has established a set of very specific rules related to charitable donations. As a result, there are only certain types of donations that are eligible for deductions.
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Deduction
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An individual can typically deduct the amount of money donated, the value of the property donated or the actual cost incurred while volunteering.
Itemization
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An individual must be eligible to itemize his deductions and choose to do so in order to claim a tax deduction for a charitable donation.
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Limits
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An individual cannot deduct more than 50 percent of gross income (or 20 to 30 percent of gross income in certain cases) even if she made charitable donations in excess of that amount.
Not Deductible
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An individual cannot claim a deduction for the value of services performed for a charity or any donations made to individuals, to political organizations or to for-profit organizations.
Recordkeeping
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In order for an individual to claim a tax deduction for a charitable donation, the individual must keep a receipt or another similar record of the donation and its value.
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