How to Determine If a Charity Deduction Is Tax Deductible?

Charitable donations reduce tax liability.

When a taxpayer makes a charitable contribution, he can deduct the contribution on his income taxes. The taxpayer must use Form 1040 Schedule A and itemize deductions in order to use the tax deduction. Charitable contribution deductions will decrease a taxpayer's tax liability. The two main criteria to use the deduction is that the contribution must be made to an appropriate charity and the property or cash must be given to the charity.

Instructions

1. Find the charity on the Internal Revenues charity list provided in the resources. If the charity is not on the list, then the donation is not deductible.

2. Check that the contribution is not set aside for a single person. Any contribution made for one single person will not be a charitable donation.

3. Determine that the amount you gave is greater than anything you may have received for the donation. If you gave less than you received, then the gift will not fall under a charitable donation. If you receive some sort of benefit or prize for your donation, then the value of the benefit must be subtracted from the donation. For example, you win a charity auction for sports tickets. The tickets are worth $100 and you paid $200. Only $100 of the donation is deductible.

References

• IRS: Publication 526
• IRS: Search for Charities