When you’re feeling inspired to give to a charity or non-profit organization, there are many ways to go about it – money, property and time. In addition to getting a warm feeling, you may also get rewarded by the federal government in the form of tax breaks for your charitable contributions.
Donating Money
When donating money, for tax purposes and safety reasons, you should never pay with cash. It is best to write a check, made payable to the organization (never to the individual collecting the donation), or use a credit or debit card. It is also a good idea to avoid giving your account information over the phone.
Donating Property
If you donate real property with a claimed value of over $500, your deduction amount depends on what the charity does with it. If the property is used as-is, you can deduct its full fair market value from your income taxes. If, however, the charity sells the property, your deduction will be the gross price the organization receives from its sale.
Donating Goods
Before dropping off your clothes, computers or other personal and household items, determine their fair market value – the price at which the items would change hands between a buyer and a seller. For tax purposes, keep a detailed record of your donations as well as evidence of the condition and number of items you donated, the date you purchased the items, and what their original price was. Get signed and dated receipts from the organization that received them.
Donating Time
If you have more time than money or possessions, you can volunteer. While there is no deduction for the value of your services, you may deduct some out-of-pocket costs associated with volunteerism, including:
- Reasonable and substantiated travel expenses
- Gas and oil expenses per charitable-use mile
- The cost of entertaining others on behalf of a charity (but not your own entertainment costs)
- The cost of maintaining your own equipment used for volunteer duties
- Uniforms required for the volunteer service you perform
For more information about tax deductions for charitable gifts, please visit, irs.gov/charities-non-profits/charitable-contributions.
