Tax-Deductible Donations: Rules for Giving to Charity

The end of the year is near, and that's when charities — and consumers — make a push for charitable giving.

What is a charitable donation?

A charitable donation is a gift money or goods to a tax-exempt organization that can reduce your taxable income.

Is charitable giving tax-deductible?

In general, you can deduct up to 60% of your adjusted gross income via charitable donations, but you may be limited to 20%, 30% or 50% depending on the type of contribution and the organization^[0]

The deduction limit applies to all donations you make throughout the year, no matter how many organizations you donate to. Contributions that exceed the limit can often be deducted on your tax returns over the next five years — or until they’re gone — through a process called a carryover.

To claim a deduction for charitable donations on your taxes, you must have donated to an IRS-recognized charity and received nothing in return for your gift. Donated to a friend's GoFundMe? That is typically not tax-deductible.

» Learn more about crowdfunding and taxes

How tax-deductible donations work

1. Donate to a qualifying organization

Your charitable giving will qualify for a tax deduction only if it goes to a tax-exempt organization, as defined by section 501(c)(3) of the Internal Revenue Code. Before you donate, ask the charity how much of your contribution will be tax-deductible.

• Examples of qualified institutions include religious organizations, the Red Cross, nonprofit educational agencies, museums, volunteer fire companies and organizations that maintain public parks^[0]

  Internal Revenue Service. Exemption Requirements - 501(c)(3) Organizations. Accessed Apr 6, 2023.

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• An organization can be nonprofit without 501(c)(3) status, which can make it tricky to ensure your charity of choice counts. You can verify an organization’s status with the IRS Exempt Organizations Select Check tool^[0]

  Internal Revenue Service. IRS Exempt Organizations Select Check Tool . Accessed Apr 6, 2023.

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Gifts to family or friends are not considered tax-deductible and may be subject to the gift tax.

» MORE: How donor-advised funds work

2. Document your charitable contributions

Keep track of your tax-deductible donations, no matter the amount. If you made a monetary contribution, qualifying documentation includes a bank statement, a credit card statement and a receipt from the charity (including date, amount and name of the organization) or a canceled check.

If you made a contribution as an automatic deduction from your paycheck through your employer, keep copies of your W-2 or pay stubs showing the amount and date of your donation.

You’ll need additional documentation in these circumstances:

• Cash or property donations worth more than $250: The IRS requires you to get a written letter of acknowledgment from the charity. It must include the amount of cash you donated, whether you received anything from the charity in exchange for your donation, and an estimate of the value of those goods and services. You must receive the letter of acknowledgment by the date you file your taxes (see the tax deadline here) for the year you made the contribution.

• If you deduct at least $500 worth of noncash donations: Fill out Form 8283 if you’ll deduct at least $500 in donated items. Additionally, you must attach an appraisal of your items to the form if they’re worth more than $5,000 total^[0]

  Internal Revenue Service. Form 8283. Accessed Oct 30, 2023.

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3. Don’t miss out on tax deductions for volunteering

IRS rules don’t let you deduct the value of your time or service, but expenses related to volunteering for a qualified organization can be counted as tax-deductible donations.

• Expenses must be directly and solely connected to the volunteer work you did; not previously reimbursed; and not personal, living, or family expenses.

• Your tax-deductible donations can include mileage you drive to charitable events and volunteer opportunities, or mileage you used to bring items to a donation site.

• You can either deduct your actual expenses using receipts for gas and similar costs, or you can take the standard mileage deduction.

• Keep your receipts if you plan to deduct your actual expenses; you may need them if you're audited.

4. Keep the deadline in mind

For your donation to be considered tax-deductible when you file, it must have been made by the end of that corresponding tax year. For example, you have until Dec. 31, 2023, to make donations you want to claim on your 2023 tax return, which gets filed by April 2024.

Per the IRS, the delivery date for a donation is determined as follows:

• Check: The day the check was mailed, not received.

• Credit card: The day the charge was made/processed, not when the bill was paid.

• Stock: The day the broker transfers the gift to the charity.

• Option: The day the option is exercised by the charity^[0]

  Internal Revenue Service. Publication 526: Charitable Contributions. Accessed Oct 30, 2023.

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Claiming tax-deductible donations on your tax return

Generally, when you file your tax return every year, you'll need to itemize your deductions in order to claim tax-deductible donations to charity. That means filling out Schedule A along with the rest of your tax return.

Itemizing can take more time than if you just take the standard deduction, and it may require more expensive tax software or create a higher bill from your tax preparer. Plus, if your standard deduction is more than the sum of your itemized deductions, it might be worth it to abandon itemizing and take the standard deduction instead. If you abandon itemizing, however, you abandon taking the deduction for what you donated.

Here are the standard deduction amounts by filing status. Again, if your standard deduction is more than the sum of your itemized deductions, it might be worth it to skip itemizing (and thus skip claiming those tax-deductible donations) and take the standard deduction instead.

» MORE: How to know when to itemize or take the standard deduction

Charitable deductions 2023

A temporary tax law ushered in by the Coronavirus Aid, Relief and Economic Security Act (CARES Act) allowed taxpayers to claim up to $600 in cash donations to qualified charities on their taxes without having to itemize for tax years 2020 and 2021^[0]

If you plan to claim itemized deductions for charitable contributions on your tax return, the deduction limit has reverted back to a maximum of 60% of your AGI. As noted above, the exact percentage you can claim is influenced by the type of contribution.