Itemized Deduction: Charitable Contributions

In order for charitable contributions to be deductible, the organization must be a nonprofit organization approved by the IRS. There is a database of approved nonprofit organizations available on www.irs.gov .

Charitable contributions are not subject to an adjusted gross income floor. This means that if you are eligible to itemize, you may be able to deduct 100% of your qualified charitable contributions. However, the total amount you can deduct in one year is limited to 50% of your adjusted gross income, with the excess carried forward into future years.

Charitable contributions can also include items other than cash, which are deducted at their fair market value. Donations of common household goods to organizations such as Goodwill, Salvation Army, and BCDS qualify as charitable contributions. There are valuation guides published that can help you determine the fair market value of non-cash contributions.

For all donations, you must have a canceled check, bank record, or a receipt with the charity’s name and donation amount. For donations over $250, the donor must obtain a written acknowledgement from the organization, stating whether goods or services were provided to the donor in exchange for the donation.