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What Qualifies as a Charitable Contribution?

Posted by Admin Posted on Feb 24 2016

Many of our clients at The Jones CPA Group are often unclear about what contributions qualify as tax-deductible charitable contributions. You may think that any money or property given to a person or organization can be claimed on your tax return. However, though all of these may be charitable acts in and of themselves, they do not all qualify for tax deduction on your return. Here are some basic guidelines to help you determine whether or not your contributions of money and property can be claimed as a tax-deductible contribution.

What Does Not Qualify?

When it comes to tax-deductible contributions, there are a few common mistakes that we often see our clients making. Here are the most common types of contributions we see individuals claiming, but which don’t actually qualify for a tax deduction:

  • Money or property given to an individual, including donations to GoFundMe projects and other online fundraising programs for individuals
  • Cost of tuition paid for another person
  • Estimated value of your personal time or services, no matter the entity it is provided to
  • Estimated value of blood given at a blood bank
  • Money or property given to groups that are run for personal profit
  • Dues, fees, or bills paid to country clubs, lodges, fraternal orders, HOAs, etc.

These types of donations and payments cannot be claimed for a tax deduction. If you would like further explanation as to why these types of donations don’t qualify, then contact one of our CPAs in Orem.

What Does Qualify?

In order for your donation to qualify, the money or property must be given to a qualified institution, such as the following:

  • Religious organizations, including churches, synagogues, temples mosques, etc.
  • Federal, state, and local governments (if given for a public purpose, such as maintaining a public park)
  • Nonprofit schools and hospitals
  • Certified charity groups, such as The Salvation Army, American Red Cross, Goodwill Industries, United Way, Boy Scouts of American, etc.
  • War veterans’ groups

You may also claim any out-of-pocket expenses incurred when serving as a volunteer for a qualified organization. For example, many of our clients volunteer in church organizations, and purchase food or other supplies for these purposes. If not reimbursed by the organization, the individual can claim those purchases as a tax-deductible charitable contribution.

 

The IRS guidelines for claiming a tax deduction for a contribution are relatively strict. They are created this way in order to prevent abuse of this specific tax deduction, but it does make the tax-filing process more complicated for those who are unfamiliar with these guidelines. If you’re unsure whether or not your charitable contributions qualify for a tax deduction, or if you need professional help in filing your taxes, the contact The Jones CPA Group in Orem.

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