3 Things to Know About Tax Deductible Donations

Things to Know About Tax Deductible Donations

If you contribute money to a tax-exempt organization, like a charity, this will help you reduce your taxable income. Each time you donate, you can claim tax deductible donations from your taxes. The amount you deduct depends on several things, like where you donated and what type of donation you made.

Donations greatly benefit charity organizations. Statistics show that about 16.8 million unpaid caregivers take care of children with complex needs under 18 in the United States. Some of these caregivers provide pediatric palliative care. If you were looking to donate and wondering how tax deductible donations work, read on to find out more.

Claiming Tax Deductible Donations

If you have donated to charity and now want to take advantage of your tax deductible donation, all you need to do is itemize at tax time. What this means is that you must fill out Schedule A together with all of your tax returns listed.

At present day, you can deduct gifts of cash to charity up to $300 for individuals and up to $600 for joint filers for 2021. This is an extension that Congress put in for 2020, which allows a married couple filing jointly to get double the deduction than they would in the past with the $300 limit. It is important to note, however, that these only apply for gifts to charity. Gifts to donor-advised funds and private foundations do not count.

Tax Deductions Depend on Where you Donate

There are a lot of organizations and individuals that can accept donations. However, not all of these will qualify for tax deductible donations. To find out if an organization qualifies, you can check if the group you are donating to is under the IRS ‘qualified organization.’

Here are examples of organizations that the IRS has approved for tax-deductible donations:


Nonprofit Community Organizations, like those that offer pediatric palliative care.


You must note that political groups or candidates do not fall under this category. Another important note is that the organization cannot be a private foundation or donor-advised fund if it is to count as a deduction.

How Much Can You Deduct?

You can deduct about 60% of your adjusted gross income if you send this gift as cash. In some instances, you might be limited to only 20% or 30%, depending on the nature of the gift and which organization you’re donating to.

For example, with organizations and charities that offer pediatric palliative care, you may be able to deduct 50% of your adjusted gross income. If you cannot deduct the full amount you gave, you can keep making deductions over the next few years until the amount is gone. This is known as a carryover.

To learn more about tax deductible donations, or to make a charitable donation, contact Ryan House today!