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How does charitable giving affect my taxes? Is it a dollar-for-dollar deduction? Is there a limit to this deduction? I never quite understood how this works.


Charitable donations are indeed deductible – dollar for dollar and with no limit – but the Internal Revenue Service has a list of conditions and restrictions that taxpayers must adhere to in order to obtain the greatest write-off. Perhaps most important, they must itemize their deductions on Schedule A of Form 1040; the standard deduction will do them no good.

Givers should also keep meticulous records. They must be able to provide bank statements, receipts or similar documentation for cash donations. The amount deducted for non-cash donations must be based on the fair market value of the items given; a special form must be completed for non-cash donations exceeding $500 in a year, possibly accompanied by a professional appraisal for any item valued at more than $5,000.

Other considerations: Donations to individuals or political organizations aren’t deductible, and taxpayers must reduce any deduction being claimed by the amount of any benefit that they obtain in the course of making the donation. Say you get two tickets to a football game in return for donating $1,000 to a charity for destitute former players. The IRS probably would allow you to deduct $1,000 less the face value of the tickets.

-Conrad de Aenlle