To deduct charitable donations on your taxes, the first step is to ensure that the organization you are donating to is recognized as a charitable organization under Section 501(c)(3) of the Internal Revenue Code. You can verify the organization's status by checking the IRS website or asking the organization directly.
Next, you will need to itemize your deductions on your tax return using Form 1040 and Schedule A. You must include documentation of your charitable contributions such as a receipt, canceled check, or bank statement showing the donation amount and the name of the organization. For donations above $250, you must also obtain a written acknowledgment from the charity detailing the amount of the donation, the date, and whether you received anything in exchange for the donation.
There are limitations on the amount of charitable donations that you can deduct on your taxes. Generally, you can deduct up to 60% of your adjusted gross income (AGI) for cash contributions to charities. For non-cash donations, such as property, the limit is typically 30% of your AGI.
Note that the Tax Cuts and Jobs Act of 2017 increased the standard deduction amount, meaning that fewer taxpayers may find it beneficial to itemize their deductions. In these cases, making charitable donations may not result in a tax deduction.
If you have further questions or need assistance in determining the amount of your deduction, it is recommended that you consult with a tax professional or licensed attorney.
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