Deductions for Charitable Contributions

On your personal form 1040 you may only deduct charitable contributions if you itemized your deductions (use Schedule A).  In order for the contribution to be deductibe it must be made to a qualified charitable organization. 

When contributing cash you must maintain a record of the contribution.  This record can be in the form of a cancelled check, a letter from the donee organization, or other written record.  It should contain the amount of the contribution, date, and name of the organization.

Any donation the entitles you to merchandise, goods, or services, including admission to events like banquets or sporting events, you can deduct only the amount that exceeds the fairm market value of the benefit received.  For example – if you make a purchase of some football tickets at a silent auction fund raiser for $50 and the tickets have a fair market value of $30, then only $20 is deductible as a chartiable contribution on your tax return. 

For any contribution that exceeds $250 you must keep in your records a contenporaneous writeen acknowledgement from the organization you donated to indicating the aount of the contribution or a description of the donated item, as well as whether or not the organization provided any goods or services in exchange. 

If you non-cash donations total more than $500 then you must fill out form 8283 with your personal form 1040.  If you are claming a non-cash donation in excess of $5,000 then you generally will be required to obtain an appraisal of your contribution.

About the author

Seattle CPA+John Huddleston has written extensively on tax related subjects of interest to small business owners. Since 2002, he has owned his own small business, Huddleston Tax CPAs. He is a graduate of Washington State University and the University of Washington School of Law.