5 Charitable Donations You Didn’t Know Were Tax-Deductible
You already know that cash donations to a qualified charity (i.e., one that’s recognized by the IRS as tax-exempt) are tax-deductible. But that’s not the only way your act of generosity can work in your favor this April. Here, five surprising charitable contributions that you can claim on your tax return.
Non-Cash Donations to a Qualified Charity
Did you give clothing, toys or furniture to your local Goodwill or Salvation Army last year? In the same way that you’re allowed to deduct cash donations, you can also take a deduction when you donate goods to a qualified charity. Just remember that in order to take that deduction, you’ll need an itemized receipt listing exactly what you gave away. And you can only deduct the fair market value of those items, meaning the amount that they’d sell for in their current condition (that armchair might have cost you $200 when you bought it, but after a few years of wear and tear, it’s probably worth closer to $50).
A lot of companies offer employees the opportunity to make charitable donations through their payroll. And while you may have felt pretty good about your donation back when you started, chances are you’ve kind of forgotten that these get taken out of your paycheck every month. To take this deduction, you’ll need to submit a pledge card showing the name of the charity and a pay stub or W-2 showing the total amount withheld—documents that your HR department should have on hand.
Expenses Related to Volunteering
While the IRS doesn’t allow you to deduct the value of your time, most of the out-of-pocket expenses related to volunteering are indeed deductible—as long as you were not reimbursed for them or they’re considered personal in nature (your Uber ride to a charity gala, for example, doesn’t qualify). Some of these expenses might include: transportation costs (including parking fees, gas mileage and tolls), uniforms or other clothing worn as part of your volunteering, and supplies used for your charitable service (like the cost of ingredients for that big pot of chili you brought to your local soup kitchen). Heck, you may even be able to deduct the cost of a babysitter if you paid them to watch your kids while you volunteered. Like with other donations, you’ll need to keep accurate records and documentation in order to claim these expenses on your return.
Ingredients for Your Local Bake Sale
Did you whip up a mean batch of brownies for a charity fund-raiser? You may be able to deduct the cost of the ingredients, says Lisa Greene-Lewis, a CPA and tax expert at TurboTax. Just make sure to save the grocery-store receipts so that you can itemize the costs in the unlikely case of an audit.
Donations to Religious Organizations
That includes churches, synagogues, temples and mosques. But again, in order to deduct your donation, you’ll need a record of it.