What To Know About Claiming Charity Tax Deductions When Filing 2025 Taxes

Key Rules for Claiming Charitable Deductions

As you gather your documents to file your 2024 taxes in 2025, understanding the rules for charitable deductions is crucial if you plan to claim them. Giving back to your community is a rewarding act, and the U.S. tax code provides a way for that generosity to potentially lower your tax bill. However, the guidelines are specific, and following them is essential to ensure your deduction is valid. Here’s a detailed breakdown of what you need to know.

1. You Must Itemize Your Deductions

This is the most critical hurdle for most taxpayers. To deduct your charitable contributions, you must choose to itemize your deductions on Schedule A of your Form 1040. This means you are opting out of taking the standard deduction. For this to be a financially sound decision, your total itemized deductions (including charitable gifts, state and local taxes, mortgage interest, etc.) must be greater than the standard deduction amount for your filing status.

For the 2024 tax year (the taxes you file in 2025), the standard deduction amounts are significant. It’s important to estimate whether your total itemizable expenses will exceed these thresholds before assuming you can benefit from a charitable deduction. The temporary provision from the CARES Act, which allowed for a limited deduction for cash donations even for those taking the standard deduction, has expired. Therefore, itemizing is once again the only path to claiming this deduction.

2. The Donation Must Go to a Qualified Organization

Not every heartfelt gift qualifies for a tax deduction. The Internal Revenue Service (IRS) has strict definitions for what constitutes a "qualified organization." Generally, these include entities like churches, synagogues, temples, mosques, non-profit schools and hospitals, and other publicly supported charities recognized under section 501(c)(3) of the Internal Revenue Code. Donations to government entities for public purposes, such as a gift to a state park, can also qualify.

Critically, donations made to individuals, political campaigns or candidates, or for-profit organizations are not tax-deductible. This includes contributions to most crowdfunding campaigns (like GoFundMe) set up for a specific person or family. To be certain an organization is qualified, you can use the IRS's Tax Exempt Organization Search tool on their website. It's always best to verify before you donate if you intend to claim a deduction.

3. Keep Meticulous Records

The burden of proof is on you, the taxpayer. The IRS requires you to keep detailed and accurate records for every single contribution you claim, regardless of the amount. The specific documentation you need depends on the type and value of your donation.

• For any cash donation (under $250): You must have a record, such as a canceled check, a bank or credit card statement, or a written receipt from the charity. The record must show the charity's name, the date, and the amount of the contribution.
• For any single donation of $250 or more (cash or non-cash): You must obtain a contemporaneous written acknowledgment (CWA) from the charity. This is a formal receipt that must include the amount of cash contributed, a description of any non-cash property, and a statement confirming whether the organization provided you with any goods or services in exchange for the gift (and an estimate of their value). "Contemporaneous" means you must have this receipt in hand by the time you file your tax return.
• For non-cash donations over $500: In addition to a receipt, you must also file Form 8283, "Noncash Charitable Contributions," with your tax return.
• For non-cash donations over $5,000: The requirements become even more stringent. You will generally need a CWA, Form 8283, and a qualified written appraisal of the donated property.

4. Understand Deduction Limits (AGI Limits)

There is a cap on how much you can deduct in a single year. For most cash contributions made to public charities, you can generally deduct an amount up to 60% of your Adjusted Gross Income (AGI). Your AGI is your gross income minus certain "above-the-line" deductions.

For donations of non-cash property, such as stocks or real estate, the limits are typically lower, often 30% or 20% of your AGI, depending on the type of property and the organization. If your donations in one year exceed these AGI limits, you don't lose the excess deduction. The IRS allows you to carry over the unused portion for up to five subsequent tax years.

5. Valuing Non-Cash Donations Correctly

One of the most challenging aspects of charitable deductions is properly valuing non-cash items. The rule is that you can deduct the item's Fair Market Value (FMV) at the time of the donation. FMV is the price a willing buyer would pay a willing seller for the item, with both having reasonable knowledge of the relevant facts.

For items like used clothing or household goods, you must value them at what they would sell for in a thrift store, not what you originally paid for them. The items must be in at least "good used condition or better" to be deductible. For higher-value items like vehicles, art, or securities, the valuation rules are more complex. For a donated car, for instance, your deduction is often limited to the gross proceeds the charity receives when it sells the vehicle, which they will report to you on Form 1098-C.

The Purpose and History of the Charitable Deduction

The concept of a tax deduction for charitable giving is not a recent development; it has been a cornerstone of the U.S. tax system for over a century. Its origins trace back to the War Revenue Act of 1917. As the United States entered World War I, lawmakers were concerned that the newly implemented and rising income tax rates would discourage wealthy Americans from making their customary large donations to charities, hospitals, and educational institutions.

At the time, these private organizations provided a significant portion of the nation's social safety net. To prevent a funding crisis for these vital institutions, Congress introduced a provision allowing taxpayers to deduct their charitable contributions from their taxable income. The core principle behind this policy was to incentivize private citizens to support public works and social services, effectively creating a partnership between the government and the non-profit sector. This encourages a vibrant civil society where individuals can directly support causes they believe in, while the government forgoes a small amount of tax revenue in recognition of the public good being provided.

Common Questions About Charitable Giving and Taxes

Navigating the nuances of charitable deductions can lead to several common questions. Here are answers to some of the most frequently asked queries that taxpayers have when preparing their returns.

Can I deduct the value of my time if I volunteer?

This is a very common point of confusion. While volunteering your time and skills is an invaluable form of giving, the IRS does not allow you to deduct the value of your services. For example, if you are a graphic designer and you design a brochure for a charity for free, you cannot deduct the amount you would have normally charged for that work.

However, you can deduct out-of-pocket expenses you incur while performing volunteer work for a qualified charity. This includes the cost of supplies you purchase (like paint for a community center cleanup) or uniforms you are required to wear. You can also deduct transportation costs, including the actual cost of gas and oil or a standard mileage rate set by the IRS for charitable driving. For 2024, that rate is 14 cents per mile. You must keep reliable records of these expenses to claim them.

What if I donate through a GoFundMe or to an individual?

Gifts made directly to an individual, no matter how compelling or deserving their situation, are never tax-deductible. The tax deduction is designed to support qualified organizations, not specific people. This means if you contribute to a crowdfunding campaign on a platform like GoFundMe that is set up to help a specific family pay medical bills or recover from a disaster, your contribution is considered a personal gift and cannot be claimed on your taxes.

The only exception is if the crowdfunding campaign is managed directly by a registered 501(c)(3) charity. Some platforms host fundraisers for established non-profits. In this case, your donation is going to the charity itself, not an individual, and the platform should issue you a tax receipt confirming this. Always check to see who the ultimate recipient of the funds is before assuming a donation is deductible.

Are contributions to political campaigns or candidates deductible?

No, contributions made to political candidates, campaigns, political parties, or Political Action Committees (PACs) are not considered charitable contributions and are not tax-deductible. The IRS makes a clear distinction between organizations that are charitable (religious, educational, scientific, etc.) and those that are political. While supporting a political cause is a civic right, it does not qualify for the charitable tax incentive. This rule applies to all levels of politics, from local city council races to presidential campaigns.

Final Thoughts on Charitable Deductions

Claiming a deduction for your generosity is a great way to make your charitable dollars go further, but it requires diligence and attention to detail. The golden rules for filing in 2025 are to ensure your total itemized deductions exceed the standard deduction, confirm your chosen charity is a qualified organization, and keep impeccable records for every single donation. By understanding and following these IRS guidelines, you can confidently and correctly report your contributions when it's time to file your taxes.

For more information, you can use these official resources:

• IRS Tax Exempt Organization Search
• IRS Publication 526, Charitable Contributions