Are donations tax deductible?

Yes, donations can be tax-deductible in the United States, but specific rules apply.

To deduct a donation, you generally must:

• Make the contribution to a qualified organization (usually a 501(c)(3) nonprofit, like a church, charity, or educational institution). You can verify an organization's status using the IRS Tax Exempt Organization Search tool.

• Itemize your deductions on Schedule A (Form 1040) of your federal tax return. The deduction is only beneficial if your total itemized deductions exceed the standard deduction amount for your filing status.

• Ensure you receive no significant benefit in return for your contribution. If you do, you can only deduct the amount that exceeds the fair market value of the goods or services received (e.g., the amount over the cost of a charity dinner ticket).

• Maintain proper documentation, such as a bank record, canceled check, or a written acknowledgment from the charity (which is required for any single contribution of $250 or more).

What is not deductible?

• Gifts to individuals, political organizations, or candidates.

• The value of your time or services as a volunteer (though you can deduct certain out-of-pocket expenses like mileage and supplies).

• Donations to most foreign organizations.

Deduction limits

The amount you can deduct is generally limited to a percentage of your Adjusted Gross Income (AGI), which varies by the type of donation and organization:

• Cash contributions to public charities are generally limited to 60% of AGI.

• Non-cash property donations are typically limited to 50% of AGI.

• Appreciated assets (like stocks held for over a year) are usually limited to 30% of AGI.

Excess contributions can often be carried over and deducted in subsequent tax years for up to five years.