When Are Your Contributions to Charity Not Deductible?
Don’t assume you get a tax deduction for everything you give to charity. Charitable contributions face a myriad of limitations. Here are some common reasons why your contribution may not be tax deductible:
To deduct a charitable contribution, you must itemize deductions. Due to Tax Reform, many individuals will claim the standard deduction (single standard deduction is $12,000 and married filing jointly is $24,000 - the 2019 amounts are about 2.5% more)
Many “contributions” are really purchases that are not tax deductible. Buying girl scouts cookies doesn’t lead to a tax deduction. Buying items at a charity’s auction only results in a deduction to the extent your purchase price exceeded the item’s value. For example, at a charity’s auction you bought a Hawaii vacation package for $1,500 that is normally sold at $1,200. Your tax deductible contribution is $300 and your non-deductible purchase is $1,200.
Raffle tickets sold by charities are nondeductible.
Contributions are only deductible to the extent they exceed the value of goods or services received. If you are attending a charity’s dinner gala for $300 but the value of the dinner is $100, your tax deduction is limited to $200.
Non-cash contributions (other than publicly traded securities) over $5,000 are not tax deductible if a qualified appraisal was not received.
Distributions from a donor advised fund are not tax deductible even if you have a receipt from the charity. Your contribution to the donor advised fund was initially tax deductible. Therefore, you can’t claim a second deduction when amounts are distributed to charity.
Generally donations to foreign organizations (except certain Canadian, Israeli, and Mexican
charities) are nondeductible.