You may claim as an itemized deduction, any charitable contributions of money or property you made to qualified charitable organizations. Generally, you may deduct charitable contributions of up to 50% of your adjusted gross income, but 20% and 30% limitations may apply in some cases. You may deduct a charitable contribution made to, or for the use of, any organization that is qualified under the Internal Revenue Code.

Defining Charitable Organizations

A qualified charitable organization is a nonprofit organization that qualifies for tax-exempt status according to the U.S. Treasury. Qualified charitable organizations must be operated exclusively for religious, charitable, scientific, literary or educational purposes, or for the prevention of cruelty to animals or children, or the development of amateur sports. Contributions made to tax-exempt charitable organizations are eligible for tax deduction on federal income tax returns. IRS Publication 78 lists most organizations that qualify to receive tax-deductible contributions.

Qualified charitable organizations include the following:

• Churches, synagogues, and religious organizations.
• Salvation Army, Red Cross, CARE, Goodwill Industries, United Way, Boy and Girl Scouts, Boys and Girls Club of America, etc.
• War veterans’ organizations.
• Nonprofit schools and hospitals.
• Federal, state, and local governments (but only if gifts are for public purposes).
• Civil defense organizations.
• Public parks and recreation facilities.
• Most nonprofit charitable organizations.
• Nonprofit volunteer fire companies.
• A nonprofit cemetery company, if the funds are irrevocably dedicated to the perpetual care of the cemetery as a whole, and not for a particular lot or mausoleum crypt.

Deductible charitable contributions include the following:

• Money.
• Dues and fees.
• Amounts paid to a qualified organization above the value of any benefits received from the organization in return.
• Used clothing, furniture, etc. The fair market values of these items are deductible, and the items must be in good used condition.
• Used vehicles, boats, and airplanes (see below).
• The cost and upkeep of uniforms worn while performing donated services. These uniforms however, must not be for general wear.
• Un-reimbursed transportation expenses that relate directly to the service to be performed for the qualified organization.
• The part of your contribution above fair market value for items such as merchandise, tickets, charity balls, or sporting events.

The following contributions are not deductible, and you cannot include them on Schedule A:

• Contributions to country clubs and other social clubs.
• Contributions to civic leagues, sports clubs, labor unions.
• Contributions to chamber of commerce and other business organizations.
• Tuition payments.
• Cost of raffle, bingo, or lottery tickets.
• Value of your time or services.
• Political contributions.
• Blood donated to a blood bank or to the Red Cross.
• Car depreciation, insurance, general repairs, or maintenance.
• Any contribution that is earmarked for the use of a specific individual.
• Sickness or burial expenses for members of a fraternal society.
• Part of a contribution that personally benefits you.
• Contributions made to groups that are run for personal profits.
• Contributions made to groups whose purpose is to lobby for law changes.
• Contributions to lobbyist groups.

If you give a deductible contribution and receive a benefit in return, you are allowed to deduct only the amount by which the contribution exceeds the fair market value of the benefit received.

The primary objective of this article is to empower taxpayers to learn to do their own taxes. For detailed information on how to deduct gifts to charity, grab yourself a copy of “Doing Your Own Taxes is as Easy as 1, 2, 3,” ($6.98) on TaxConnections.com