The Truth Behind Tax Deductible Donations

Making a charitable donation can not only benefit someone in need, but it can be used as a tax deduction. With so many charities out there, it is important when tax season rolls around that you know which contribution can earn you a deduction. A taxpayer must have written proof that a donation was given in order to get a deduction come tax time. There are some details surrounding tax deductible donations that you must know before you make a claim.

Time Table- When taking a deduction, you can only claim the deduction in the same year in which it is made. For example, if you make a donation in 2011, you can only claim it for that year.

Qualifications- Even though most charitable organizations qualify for charitable contributions, you must do your homework beforehand—just to be certain. There are some exceptions to the list, which means looking to see if the charity has a 501(c)(3) attached to it. This means the IRS officially has it listed as a nonprofit organization.

Limitations- While you can always give as much as you want to charity, there may be a limit on how much you can claim. Giving more than 20% of your adjusted gross income to charity can alter money that you can receive back from your donation.

Car Donations- When donating your car, you must do some research.  There are numerous places that state that giving a car will get you a deduction on your taxes.  Making sure the organization is on the list of the IRS as a charitable organization is key, but now you must make sure the car being donated is used for donated purposes and not being resold.

A benefit of giving to charity is helping someone who is less fortunate, but getting a tax deduction for your generosity is certainly a bonus. Make sure you do your homework before making a deduction as the IRS has a list of charities and originations that are tax deductible donations.