🎁 Schedule A: Charitable Contributions

Today, we will review another important category of deductions – charitable donations.

💵 What can be deducted?

Charitable contributions can be in the form of:

• Cash donations (cash, transfers, checks),

• Donations of property,

• Expenses related to volunteer work.

❎ Charitable donations are reduced by the value of any benefits received in exchange for the donation.

❗️ Often, you may need to verify your donation (the common practice is a written confirmation from the charitable organization itself).

📝 Non-cash donations

If the total value of your non-cash donations is $500 or more, you will need to submit Form 8283 with a description of those donations to claim the deduction.

💰 Does it have to be any organization?

Donations can only be deducted if they are made to qualified organizations that meet the requirements of section 501(c)(3) of the U.S. Tax Code.

📎 Important to remember:

• Churches that meet the 501(c)(3) requirements are automatically considered qualified for receiving donations.

• Gifts to individuals are not deductible.

🔒 Deduction limits

The maximum deduction amount in a year depends on the type of donation and can be up to:

• 60% of your AGI (Adjusted Gross Income) for cash donations,

• 30% for property donations,

• 20% for certain other types of donations.

Any amount exceeding these limits can be carried forward for up to 5 years.

📍 Example:

If your AGI is $50,000, you can deduct up to $30,000 for cash donations in one year (60% of your AGI). Any donations exceeding this amount can be carried forward to future years.

🔎 Conclusion:

The deduction for charitable donations is an excellent tax tool for those involved in charity. If you itemize deductions, these donations can significantly reduce your tax liability.

🔜 What’s coming in 2026?

In the next post, new rules for charitable donation deductions, effective in 2026, will be discussed.

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