Charitable Contributions: What Qualifies and What Doesn’t?

28 Feb Charitable Contributions: What Qualifies and What Doesn’t?

Charitable contributions are a major part of most of our clients’ taxes here at The Accounting Guys. Many people seem to think that any donation given to any person or organization can be listed on your tax return. And while any donation is certainly a charitable act, unfortunately, not all of them can be counted as a qualifying charitable contribution. If you’re unsure whether or not your recent donation can be included as a tax deduction, check out the guidelines below, or contact one of our CPAs in Provo for tax assistance.

Qualifying Charitable Contributions

So what allows a contribution to be counted as a tax deduction? It all comes down to what institution you made the donation to. There are a few exceptions, but generally speaking, donations made to the following types of organizations qualify as a tax deduction:

  • Churches, synagogues, temples, and other religious organizations
  • Local, state, and federal governments, if the donation is made for a public purpose, like maintaining a park
  • Nonprofit hospitals
  • Nonprofit schools
  • Certified charity groups (a few examples include the American Red Cross, Goodwill Industries, Salvation Army, United Way, etc.)
  • War veterans’ groups

In addition to deducting cash and items donated to these groups, you can also deduct any expenses incurred while volunteering for the above types of groups. For example, if you volunteered for a church organization and purchased food or other items, you can deduct those purchases on your taxes if the organization did not reimburse you. You can also deduct miles driven for these organizations as an expense, provided the miles are carefully tracked. Our CPAs can tell you more about how to track these items.

Common Unqualified Contributions

For the most part, any donations made to a group or person that does not fall under the categories listed above, do not qualify as a tax-deductible contribution. At The Accounting Guys, we see a few common items that people try to claim on their tax returns. Please be aware that the following types of contributions do not qualify for a tax deduction and cannot be claimed on your return:

  • Donations to GoFundMe projects or other online fundraising programs for individuals
  • Tuition paid for another person
  • Approximate value of blood donated at a blood bank
  • Any donation to groups that run for personal profit
  • Dues or fees paid to organizations such as HOAs, lodges, and country clubs

Additionally, please be aware that you cannot deduct the value of your personal time or services provided for volunteer work, regardless of what institution the work was done for. For example, if you are a professional carpenter and built a pinewood derby track for your local Boy Scout troop, you could deduct the cost of materials used, but you cannot deduct an hourly rate of the time you spent building the track.

If you have any further questions regarding what qualifies as a tax-deductible donation, please reach out to our tax firm in Provo for tax assistance.

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