Charitable donations are a great way to give back to your community. Whether you give goods or money, it feels good to support the causes you care about—especially amidst the hustle and bustle of the holiday season. But if you want those donations to qualify as tax deductions on your 2025 tax return, you only have until December 31, 2024.
So, before the deadline and before tax season rolls around, let’s break down which donations can lower your tax bill and which cannot.
What Is a Tax-Deductible Donation?
A tax-deductible donation is a gift you give to an organization that the IRS recognizes as a nonprofit. These donations can be deducted from your taxable income, which can reduce the amount of taxes you owe. For a donation to be tax-deductible, it must meet specific IRS guidelines. Here’s what qualifies:
1. Donations to 501(c)(3) Organizations
These are charitable organizations that the IRS has approved as tax-exempt. Examples include:
- Churches, synagogues, temples, and mosques
- Nonprofit educational organizations like SMART Reading or Salem-Keizer Career Technical Education Center (or schools and universities)
- Nonprofit hospitals and medical organizations like Salem Free Clinics or Willamette Vital Health.
- Public charities like the American Red Cross, Habitat for Humanity, or local food banks like Marion Polk Food Share.
2. Donations of Goods or Money
You can donate cash or goods, like clothing, furniture, or even a car. As long as you’re giving to a qualifying nonprofit, these can usually be deducted. But make sure to keep receipts or records of your donation!
3. Contributions to Federal, State, or Local Governments (for public purposes)
If you make a donation to support a government program or project, such as public parks or schools, your donation could be tax-deductible.
What is Not a Tax-Deductible Donation
Unfortunately, not every gift or donation you make can be deducted from your taxes. Here are some examples of donations that do not qualify:
1. Donations to Individuals
If you give money or gifts to a person, even those in need, it is not tax-deductible. For example, contributions to GoFundMe campaigns do not qualify, nor does money given to a friend facing high medical bills.
2. Contributions to Political Organizations or Campaigns
Supporting a candidate or political party is not tax-deductible. Donations to political campaigns, action committees (PACs), or political fundraising events don’t count.
3. Donations to For-Profit Organizations
Any donation you make to a for-profit business, regardless of the cause, is not tax-deductible.
4. Donations to non-qualified charities and nonprofits.
Similarly, donations made to groups or organizations not registered as qualified nonprofits with the IRS are not considered tax-deductible. In most cases, charities and nonprofits must be registered as a 501(c)(3) or (occasionally) a 501(c)(4) organization to qualify for tax-deductible donations.
5. Donations Without Proper Documentation
If you don’t have a receipt or record of your donation, the IRS won’t let you claim it. This includes small cash donations without a paper trail. So, always get a receipt!
6. Donations in Exchange for Goods or Services
If you give money and receive something in return, only part of your donation might be tax-deductible. For example, if you donate $100 to a charity and receive a concert ticket worth $50, only the difference ($50) is deductible.
7. Donations Made After December 31
For your donation to be considered tax-deductible, you must make it by the end of the corresponding tax year. So, in this case, you have until 11:59 p.m. on December 31, 2024, to make donations you plan to claim on your April 2025 tax return.
Tips for Making Sure Your Donations Are Tax-Deductible
- Check the Organization’s Status. Before donating, make sure the group is recognized as a qualified charitable organization (in most cases, a 501(c)(3) organization). You can check their status with the Tax Exempt Organization Search Tool on the IRS website.
- Keep Good Records. Always keep receipts, acknowledgment letters, or bank records showing how much you donated and when. For goods donations, keep a list of the items and their estimated value.
- Know the Limits. Most taxpayers can deduct up to 60% of their adjusted gross income (AGI) in charitable donations. If you’re giving a lot, check to see if your donations are approaching the limit.
Not all donations are created equal when it comes to taxes. Donations to recognized nonprofits, religious organizations, and certain government programs are tax-deductible, while gifts to individuals, political organizations, and for-profit businesses are not. Keep good records, double-check that the charity is eligible, and enjoy the good feeling of giving back—while also possibly lowering your tax bill!