4 FAQs About Charitable Tax Deductions

April 30, 2021

Making charitable donations throughout the year does more than providing help to those who need it. It also means enjoying more deductions at tax time. If you are new to charitable donations and wish to know what they mean for your taxes, review what your Encino tax consultants want you to understand via the following frequently-asked questions and answers. 

Can I Apply Charitable Donations if I Opt for the Standard Deduction? 

It is possible to deduct donations only if you itemize your deductions, as they do not apply if you select the standard deduction. To determine if you should itemize or not, add up your deductions, charitable or otherwise, and see if the total is greater than the standard option. If it is, stick with itemization to pay less in taxes. 

What Organizations Qualify For Charitable Gifts? 

The IRS provides a list of qualified organizations they accept for charitable gift deductions, including community funds, organizations, trusts, and foundations. They also accept donations to state and federal charities, religious organizations such as churches and synagogues, nonprofit volunteer firefighter companies, nonprofit cemeteries, war veteran organizations, and domestic fraternal societies among others. 

Is There a Time Limit For Making Donations?

For a charitable gift to be applicable to your taxes, the donation must have taken place before the end of the tax year. Those made during the following tax year subsequently count for that year’s taxes. As an example, if you made a charitable donation in January 2021, it will count for your 2021 taxes, not your 2020 taxes. 

Do I Have to Furnish Evidence of My Donation(s)?

The IRS requires proof for any charitable donation of $500 or over. Your Los Angeles accountants emphasize that large contributions without evidence raise questions since they can indicate fraud. Rather than facing an audit, ensure you have proof of all significant donations. You can simply enter any donations under $500 when you’re doing your taxes, or let your preparer know. Keep track of all donations throughout the year to make certain you don’t miss any deductions. 

For help with your taxes, contact your Los Angeles accounting service at Wallace & Associates