Top Show Updated for Tax Year 2022 • October 18, 2022 06:47 AM OVERVIEW Giving is truly better than receiving, especially when your generosity can provide income tax benefits. Key Takeaways • You can deduct up to $300 of qualified charitable cash contributions ($600 if married filing a joint tax return) from your adjusted gross income without itemizing deductions. • To claim qualified charitable donations greater than $300 ($600 if married filing
joint) you must itemize deductions on Schedule A. • Always keep proof of your gift, such as a bank or credit card statement, canceled check, or written acknowledgement from the charity showing the date and value of the donation (if greater than $250). • When you claim a donation of property worth more than $5,000, the IRS requires an independent verification of its value from an appraiser. Your donations countThere are a lot of good reasons to make donations to charity, but most boil down to one simple fact: Giving feels good. It’s no surprise, then, that many Americans give money or property to organizations they care about. In fact, some give quite a bit. Cross your t's and dot your i'sWhether you’re a minor donor or a philanthropist, you probably give because you want to help. Still, taking maximum advantage of tax breaks for your charitable efforts can make a difference to your bottom line—and involves following some fairly straightforward rules for deducting your donations:
TurboTax Tip: When donating a vehicle, you’re only allowed to deduct the charity’s actual selling price, documented with a statement of sale. However, if the charity uses your car, you’re entitled to deduct the vehicle’s fair market value. Restrictions on deducting charitable donationsThe IRS limits charitable deductions in certain circumstances, including:
The IRS allows these deductions because they want to encourage charitable giving. Sticking to the guidelines described above will help you ensure that the goodness in your heart translates to goodness on your tax return as well. Remember, with TurboTax, we'll ask you simple questions about your life and help you fill out all the right tax forms. With TurboTax you can be confident your taxes are done right, from simple to complex tax returns, no matter what your situation. All you need to know is yourselfAnswer simple questions about your life and TurboTax Free Edition will take care of the rest. For simple tax returns
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The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business. |