If taxpayers gave money or goods to a charity in 2016, they may be able to claim
a deduction on their federal tax return. Taxpayers can use the Interactive Tax
Assistant tool, Can
I Deduct my Charitable Contributions?, to help determine if their
charitable contributions are deductible.
Here are some important facts about charitable donations:
- Qualified Charities. Taxpayers must donate
to a qualified charity. Gifts to individuals, political organizations or
candidates are not deductible. To check the status of a charity, use the
IRS Select
Check tool.
- Itemize Deductions. To deduct charitable
contributions, taxpayers must file Form 1040 and itemize deductions. File Schedule
A, Itemized Deductions, with a federal tax return.
- Benefit in Return. If taxpayers get
something in return for their donation, they may have to reduce their
deduction. Taxpayers can only deduct the amount that exceeds the fair
market value of the benefit received. Examples of benefits include
merchandise, meals, tickets to events or other goods and services.
- Type of Donation. If taxpayers give
property instead of cash, their deduction amount is normally limited to
the item’s fair market value. Fair market value is generally the price
they would get if the property sold on the open market. If they donate
used clothing and household items, those items generally must be in good
condition or better. Special rules apply to cars, boats and other types of
property donations.
- Noncash Charitable
Contributions.
File Form
8283, Noncash Charitable Contributions, for all noncash gifts totaling
more than $500 for the year. Complete section-A for noncash property
contributions worth $5,000 or less. Complete section-B for noncash
property contributions more than $5,000 and include a qualified appraisal
to the return. Taxpayers may be able to prepare and e-file their tax
return for free using IRS Free
File. The type of records they must keep depends on the amount and
type of their donation. To learn more about what records to keep, see Publication
526, Charitable Contributions.
- Donations of $250 or
More.
If taxpayers donated cash or goods of $250 or more, they must have a
written statement from the charity. It must show the amount of the
donation and a description of any property given. It must also say whether
they received any goods or services in exchange for the gift.
Taxpayers should keep a copy of their tax return. Beginning in 2017,
taxpayers using a software product for the first time may need their Adjusted
Gross Income (AGI) amount from their prior-year tax return to verify their
identity. Taxpayers can learn more about how to verify their identity and
electronically sign tax returns at Validating
Your Electronically Filed Tax Return.
Additional IRS Resources:
- Charitable
Contributions – Topic 506
- Publication 561, Determining the Value of Donated Property
- Publication 526, Charitable Contributions
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