Charitable Contributions and Your Taxes: What Every Taxpayer Should Know

Giving back to the community is something many people value deeply. Whether you donate to support disaster relief, local nonprofits, religious organizations, or community programs, charitable giving not only helps others — it can also provide meaningful tax benefits when handled correctly.

At Tax & Beyond LLC, we often meet clients who donate generously but miss out on tax deductions simply because they don’t understand the rules. This guide will help you understand how charitable contributions affect your taxes and how to make the most of your generosity.

Understand Itemized Deductions

One of the most important things to know is that charitable donations are usually claimed as itemized deductions on your tax return.

This means:

• You must choose itemizing deductions instead of taking the standard deduction.

• Your total itemized expenses (charity, mortgage interest, medical expenses, etc.) must exceed the standard deduction to benefit.

Many taxpayers automatically take the standard deduction without realizing they could save more by itemizing — especially if they made significant donations during the year.

A tax professional can help compare both options and determine which gives you the better outcome.

Keep Donation Receipts

Documentation is essential when claiming charitable contributions.

The IRS requires proof of your donations, so always keep:

• Donation receipts

• Bank or credit card statements

• Written acknowledgment from charities (for larger donations)

• Emails confirming online contributions

For any donation of $250 or more, you must have a written confirmation from the organization before filing your taxes.

A simple habit of saving receipts throughout the year can prevent problems later if your return is reviewed.

Know Fair Market Value Rules

Donations are not limited to cash. Many people donate:

• Clothing

• Furniture

• Electronics

• Vehicles

• Household goods

However, you cannot deduct the original purchase price. Instead, you must use the fair market value — the price the item would sell for in its current condition.

For example:

• Used clothing is valued at resale prices, not retail cost.

• Items must generally be in good or better condition.

Keeping photos and valuation records can help support your deduction.

Be Aware of Contribution Limits

The IRS places limits on how much charitable giving you can deduct in a single year.

Generally:

• Cash contributions can be deducted up to a percentage of your adjusted gross income (AGI).

• Excess contributions may sometimes be carried forward to future tax years.

Understanding these limits ensures you plan donations strategically and maximize long-term tax benefits.

Consider Qualified Charitable Distributions (QCDs)

For individuals age 70½ or older with retirement accounts, a Qualified Charitable Distribution (QCD) can be a powerful tax strategy.

A QCD allows you to:

• Donate directly from an IRA to a qualified charity

• Reduce taxable income

• Satisfy required minimum distributions (RMDs)

This option can lower overall tax liability while supporting causes you care about — a win-win situation.

Smart Giving Starts With Smart Planning

Charitable giving should feel rewarding, not confusing. Proper planning ensures your generosity benefits both the community and your financial future.

At Tax & Beyond LLC, we help individuals and businesses across the United States make informed tax decisions. From tax preparation and financial consulting to IRS assistance and accounting services, our goal is to make complex financial matters simple and stress-free — especially for members of the Nepali community living in the U.S.

If you made charitable contributions this year or plan to donate soon, our team can help you understand how those donations impact your taxes and ensure you receive every benefit you deserve.

Give generously. Plan wisely. File confidently — with Tax & Beyond LLC.