Question

In general, deductible contributions to public charities in 2019 cannot exceed 60% of a taxpayer’s adjusted gross income for the year.

True False

Answer 1

TRUE,

For a taxpayer to take a tax deduction for a charitable contribution, you'll need to select the itemized deduction over the standard deduction method. Before you do this, compare standard versus itemized deduction, first. If you select the itemized deduction method you'll have to list out all of your deductions, expecting that they'll add up to more than the standard deduction. The most common expenses that for itemized deductions are: Home mortgage interest, state and local taxes, charitable contributions, medical and dental expenses.

                      If you donate to a qualified charity or non-profit organization, you might be able to claim the donation as tax deduction on your tax return. For your 2019 return, the limit on charitable contributions of cash has increased from 50% to 60% of your adjusted gross income or AGI. The easiest way to find out if you can deduct your charitable donations is to start a free tax return on eFile.com. Based on your answers to the tax questions, we will determine whether or not you can claim the tax deduction on the donations you made to charity during the tax year.

Deductible Charitable Contributions

A deductible charitable contribution is a donation or gift made to a qualified organization. The donation must be made voluntarily and with no expectation of any substantial reward or benefit. Generally, you can deduct any cash contributions you make, and you can deduct the fair-market-value of any donated property, such as clothing, household items, or vehicles. You may also claim a deduction for the contribution of stocks.

Cash Donations

A cash donation includes money contributed by check, credit card, electronic funds transfer, or payroll deduction. The donation cannot exceed 60% of your Adjusted Gross Income (AGI) in order to qualify as a tax deduction. You must obtain a receipt for any amount of money you donate in order for your contribution to be qualified.

Food, Clothing, and Household Items Donations

You may deduct the fair market value of food, clothing, or household items such as furniture, furnishings, linens, appliances, and electronics. Any donated household item must be new or used but in good condition. There is no fixed method for determining the value of donated items, but if you need guidance, please see IRS Publication 561 - Determining the Value of Donated Property.

Car and Vehicle Donations

You may donate cars, trucks, boats or even planes. The value of your donation will be determined by how the charitable organization uses the vehicle. The organization will provide you with paperwork describing how the vehicle was used and, if it was auctioned, what the selling price was.