How to Claim Tax Deductible Donations on Your Tax Return
Did you know that contributing to your favorite, tax-exempt charity organization can be good for both your well-being and wallet? A tax-deductible donation is any money or goods you contribute which can reduce your taxable income. If you wish to claim your tax-deductible donations for a tax credit, all you have to do is itemize on your tax return.
This means filing Schedule A of IRS Form 1040 or 1040-SR. However, you’re still allowed to file up to $300 of cash donations per person, per tax return, without first itemizing. If the amount goes above this, you’re generally allowed to deduct up to 60% of your adjusted gross income or 100% for cash gifts.
In some cases you may be limited to below 60% depending on the type of donation you have made. For instance, donating to a private foundation will limit the percentage you can deduct.
Some Important Things to Know About Tax Deductible Donations
- If you make a contribution that exceeds the limit, you can carryover those funds to use as deductions for up to 5 years. This process is known as carryover.
- In 2021, married couples filing jointly can deduct up to $600 without having to itemize the donation. This is known as an above-the-line deduction.
- The CARES Act ensured the 60% limit for cash donations no longer applied. In this instance, you can now deduct up to 100%.
How to Claim Tax Deductible Donations On Your Tax Return
The good news is, claiming tax-deductible donations to charity isn’t a complicated process. If you’re not making an above-the-line deduction, you’ll need to itemize your deductions during the tax season. As mentioned earlier, this involves filling out Schedule A.
For Arizona residents, there’s also the Arizona Charitable Tax Credit, which provides dollar-for-dollar tax benefits, up to a certain dollar amount depending on whether you are a joint or individual filer. To claim your deductions, be sure to retain a copy of your gift’s receipt, so you can include it in your tax return. You also have to complete either Arizona Form 321 or Arizona Form 352.
It’s important to note that you must meet the guidelines for tax-deductible donations to charity before you can be rewarded for your generous deed. For instance, you must donate to a qualifying, tax-exempt organization, such as Ryan House.
How You Can Support Ryan House
If you’re an Arizona resident looking to make a big difference by making a tax-deductible donation to a qualifying charitable organization, we encourage you to look no further than Ryan House.
We provide quality care for families and children with complex medical needs navigating life-limiting or life-ending journeys. On average, 5% of our pediatric palliative care patients are under one year of age, including perinatal patients, and 95% were between the ages of two and seventeen. Through your contributions, we are making a big difference in the lives of many wonderful children and their families.