How Tax Deductible Donations Work in 2024 (And 3 Things To Keep In Mind)
A simple guide to tax deductible donations for 2024
Donating to charity not only helps support causes you care about but can also provide you with valuable tax benefits. The IRS allows taxpayers to deduct charitable donations from their taxable income, reducing the amount of taxes you owe. This guide will help you understand how tax-deductible donations work and what you need to know when making your contributions. (*Please note, this guide is intended for people living in the United States).
What Are Tax-Deductible Donations?
Tax-deductible donations are contributions of money or goods made to a qualified tax-exempt organization, such as a charity. As long as you do not receive a direct benefit in return for your donation, you may be eligible to claim it as a tax deduction.
What’s the Benefit?
Simply put, tax-deductible donations can lower your taxable income, which may reduce the amount of taxes you owe. By supporting a charity, you’re not only helping a worthy cause but potentially saving money on your tax bill.
How Does It Work?
1. You donate to a qualified charity or organization.
2. After your donation, the charity provides you with a receipt.
3. Using this receipt, you can either:
- Deduct the charitable contribution as an itemized deduction on Schedule A, Form 1040.
- Take the standard deduction (if you don’t itemize deductions).
Both of these options can reduce your taxable income and, therefore, your tax liability.
3 Things to Keep in Mind When Making Tax-Deductible Donations
- You Must Donate to a Qualifying Organization
While many organizations accept donations, not all are tax-exempt and eligible for deductions. You can verify whether an organization is qualified by using the IRS Exempt Organizations Search tool. DonorSee and many of our partner projects are fully qualified, and you can give directly to tax-deductible projects right here on our platform.
- How Much You Can Deduct Depends on Your Adjusted Gross Income
The IRS limits the amount of charitable contributions you can deduct based on a percentage of your Adjusted Gross Income (AGI). For the 2024 tax year, the general limits are:
- Cash Contributions: You can deduct donations to qualified public charities up to 60% of your AGI.
- Non-Cash Contributions: Deductions for non-cash donations, such as property or appreciated assets, are typically limited to 50% of your AGI.
- Appreciated Assets: If you donate appreciated assets held for more than one year, like stocks, the deduction is generally limited to 30% of your AGI.
If your charitable contributions exceed these limits in a given year, the excess amount can be carried forward and deducted over the next five years, subject to the same percentage limitations each year.
Please note that the temporary provision allowing deductions up to 100% of AGI for cash donations, which was available for the 2020 and 2021 tax years, has expired.
- Keep Your Receipts as Proof
The IRS requires proof of all charitable contributions, and without it, you may be limited to deducting only cash donations under $300. You’ll need to provide your bank records or payroll deductions for any donation of less than $300. For donations over $300, you must have a written receipt or acknowledgment from the charity.
DonorSee automatically sends you a tax receipt after each donation, which will be emailed to you for your records. This receipt is your proof for tax purposes.
Looking for a Simple Way to Make a Tax-Deductible Donation?
At DonorSee, we make giving easy, transparent, and impactful. All donations on our end-of-year page are 100% tax-deductible, so you can lower your tax bill while supporting meaningful causes. Here’s how it works:
- All of our projects are vetted for legitimacy.
- Donations are processed securely by Stripe.
- You’ll receive an automatic tax receipt.
- Plus, you’ll receive a video update showing exactly how your donation was used and the joy you created.
Ready to make a tax-deductible donation? Visit our end-of-year donation page to get started!
