Charitable Deductions

Charitable giving can be a great way to help the less fortunate as well as save on your taxes. The first rule of charitable tax deductions is that your donation must go to a legitimate and government qualified organization. Charitable organizations must file an application with the IRS in order to be qualified. The IRS website
has an useful online search tool for finding qualified charities.

If you have already donated your time, money, or services to a charitable organization and are interested in filing for a charitable deduction, the first step is to turn your attention to the tax form 1040. You should itemize your deductions on Schedule A of that form.

If your charitable donation is a purchase, such as a ticket to an event or memorabilia item, you should deduct the market value of your ticket from the total amount of your donation. For example, if you purchase a ticket to a charitable dinner for $100, of which the market value of the dinner is only $60, you are permitted to claim only $40 of that donation. "Fair market value" can be defined as the price at which the item would exchanged at by a willing and fully aware buyer and seller. You cannot claim a deduction on any item you derive financial benefit from.

In addition, if you wish to claim a deduction in excess of $250, you must have bank statements, a written acknowledgment of your donation from a qualified organization, or other financial documentation. You will not be allowed to claim a deduction without the proper documentation.

Below are some other circumstances in which you can claim charitable deductions.

- You may be able to deduct your expenses if you have a foreign student living with you through a qualified organization.
- You may be able to deduct your expenses for uniforms if the charity or volunteer organization you donate your time to requires them.
- You may be able to deduct the cost of your gas and oil if you directly use your car while in commission for a charitable organization.

Enjoy your charitable giving!