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Not All Charitable Donations Are Created Equal

Claiming a charitable donation on your tax return can help ease your tax burden, however, not all charitable donations are in fact, tax deductible. While that may seem unfair, if it is important to you to take a tax deduction for your charitable donation, you can certainly find out ahead of time which donations are tax deductible. For one thing, the organization to which you donate must qualify as a deductible organization. This might be important to know if you spend the bulk of your charitable contributions donating to a family that lost their home in a fire.

As a matter of fact, according to the IRS, donations to individuals are not tax deductible, while donations to a qualified organization that helps individuals are. You may not then, request that your donation be set aside for a specific individual, even though it is disbursed by the charitable organization, unless of course, you are willing to forego the deduction.

While we've all heard the old saying, "time is money," the IRS doesn't agree, at least when it comes to deductible contributions. This means that while you may deduct your gift of money to a qualified charitable organization, you may not deduct your gift of time. This is true even if you are doing the same job as a volunteer that an employee of the organization is being compensated for. You may however, deduct your mileage, and the cost of your uniforms in some cases.

Suppose you attend a charitable event at which you donate a rather large amount in order to attend. If you are then given something of value from the charity, such as tickets to an event, a DVD, CD, book, or anything of value, you must then minus the cost of the value of the item from your contribution. For example, if you attend a charity event and pay $40 for lunch with an author who then gives you a copy of her $20 book, your tax deduction can only be $20 for that event.

Although you may be able to deduct childcare expenses when you work for pay, that is not an allowable deduction when you volunteer your time to work for a charitable organization. If you pay for childcare for both volunteer work and work for which you get paid, you'll need to be sure and separate those expenses and claim only the amount you are entitled to claim based on your paying job.

Some items for which you claim a deduction may need to be appraised, such as jewelry or art. Whether you choose to get an appraisal or are required to by the IRS, the cost of the appraisal is not tax deductible. If you don't want to pay for an appraisal and if it is an item the charitable organization will sell, you can obtain a receipt once the item is sold and that will be your deductible amount in some cases.

While not all donations are tax deductible, some of the ones that are have criteria attached that must be met in order for the deduction to be legitimate. To be sure of the status of your tax deduction for charitable contributions, check with your tax professional or check the IRS website for publications regarding charitable contributions. In some cases, a separate form must be completed with your tax return in order to claim the deduction.

The IRS also maintains a list of qualified organizations on their website so it will be easy for you to check to see if the organization you have contributed to or are thinking of contributing to is a qualified organization for tax purposes.

Tax deductions are just one aspect of the charitable giving process. Remember the reason you are donating in the first place and if it turns out you aren't eligible for a tax deduction, just remember how good it felt to give.