Deduction Laws for Donations to a 501c3

If you make a charitable donation to a 501(c)3 non-profit organization, chances are your donation will be tax deductible, but how much of a deduction you can take is subject to tax deduction rules and laws. If you're going to make a hefty donation to a non-profit organization, double-check the charitable tax status of the organization before you make your donation to keep from losing a possible deduction because of a lapsed status.

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Work Doesn't Count

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When it comes to non-profit deductions, work doesn't count. Any work or service you perform for a 501(c)3 or other non-profit organization, whether it's raking leaves or providing free medical care, cannot serve as a deduction on your taxes in and of itself. If you drive to the spot where you're volunteering or take the bus, you can deduct the cost of your bus ticket or count your mileage as a deduction.

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Itemize

No matter how much money or how many items you donate to charity in a given year, you will not receive a tax deduction based on your charitable contributions to 501(c)3s if you don't itemize. Tax deductions for charitable contributions can only be taken if an itemized tax schedule is filled out. If you tend to file a 1040EZ form, which doesn't itemize deductions, your charitable contribution won't deduct anything from your taxes.

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Know the Limits

You can't always deduct the total amount of your donation to a 501(c)3, due to the limits placed on charitable deductions by the federal government. You cannot deduct more than 50 percent of your total adjusted gross income. Depending on the specific donation, this limit can decrease to 20- to 30 percent. Certain donations of capital gains property and donations to some non-profit organizations, such as fraternal societies, typically fall under the 20 or 30 percent limit. If you make more than $166,800 a year as a couple filing jointly, other limits on charitable donation deductions and other deductions also apply.

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