Charitable tax deductions

Your charitable contributions qualify for charitable tax deductions as long as you do not receive something in return for your charitable contributions.

Example of IRS Charitable tax deductions

For the IRS charitable tax deductions purposes, if you make a charitable contribution of $200 to your church, your charitable tax deduction will be $200. If you are in the 28% tax rate bracket and itemize tax deductions, you will save $56 in Federal taxes. That is 28% of $200 which is $56. Thus, the charitable contribution only costs you only $144 ($200 - 56).

Reduced IRS charitable tax deductions

Your IRS charitable tax deductions are reduced if you receive something in return for your charitable contributions. An example of something in return for your charitable contribution is a dinner. If you receive something in return, you must reduce your charitable contribution by the value of what you receive. The charitable organization is required to tell you the value of what you receive so you can calculate your IRS charitable tax deduction.

Example of reduced IRS Charitable tax deductions

If you donate $100 to an organization as a charitable contribution and the organization is having a party and you attend the party, your IRS Charitable tax deduction is limited. If the value of the party is $60, you can only make a charitable tax deduction of $40 ($100 - 60).