How to Determine What the IRS Considers a Charitable Contribution

You can become a more savvy donor by understanding the Internal Revenue Services' rules surrounding charitable contributions and by being clear about the kinds of organizations to which you can donate and receive a tax deduction. What this information includes - and excludes - may surprise you.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• IRS Forms
• Financial Calculator
• Receipts
• Paper And Pencils

1. Learn how the IRS defines charitable contributions: a donation or gift to a qualified organization that is both voluntary and made without getting, or expecting to get, anything of equal value.

2. Learn which organizations qualify: religious organizations; most nonprofit charitable organizations; most nonprofit educational organizations; hospitals and medical research organizations; public parks and recreation facilities; war veterans' groups; domestic fraternal groups operating under the lodge system; certain nonprofit cemetery companies; nonprofit volunteer fire companies and civil defense organizations; and federal, state and local governments - if operating solely for public purposes.

3. Learn about different kinds of deductible contributions: certain costs associated with sponsoring a live-in student, and out-of-pocket expenses paid when volunteering for a qualified organization.

4. Be aware of organizations that can receive nondeductible donations: civic leagues, social and sports clubs, labor unions, chambers of commerce, most foreign organizations, groups run for personal profit, homeowner's associations, individuals, political groups and candidates for public office.

5. Learn what is not deductible as a charitable contribution: the cost of raffle, bingo and lottery tickets; dues, fees or bills paid to country clubs, lodges, fraternal orders or similar groups; tuition; the value of your time or services; the value of blood given to a blood bank.

Tips & Warnings

• Review IRS Publication 526, "Charitable Contributions," for more detailed guidelines.
• Read IRS Publication 78, which lists all organizations qualified to accept tax-deductible donations. The publication can be found online or in your local library's reference section.