Tax Deductions and Credits Holiday Donations and Tax Savings Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by Jim Wang Published Nov 27, 2023 - [Updated Dec 19, 2023] 4 min read Reviewed by Lisa Greene-Lewis, CPA and tax expert for TurboTax Tax Deductions and Credits Holiday Donations and Tax Savings Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by Jim Wang Published Dec 19, 2023 4 min read Reviewed by Lisa Greene-Lewis, CPA and tax expert for TurboTax Every year around this time, we start thinking about what we plan to do in terms of charitable contributions. For most, there are a few organizations we like to support with cash, and a few we like to support with time. Regardless of how you decide to give, it’s important to keep your taxes in mind so you can save as much as possible when you go to file your return. If the government is willing to give you a tax break as you’re helping others, it makes sense to take advantage of it, right? Here are a few ways to help make sure you’re getting all of the deductions you deserve this year. Table of Contents Save Your ReceiptsDonate GoodsTrack Your Mileage Save Your Receipts If you make a donation and want a tax deduction, you are required to retain a record of that donation. It’s important to realize that acceptable records are those that are “official.” This means a bank record (such as a canceled check or the charity’s name for a debit or credit donation on the bank statement) or a receipt from the charity itself. Bottom line: if you want the tax deduction from your donation, you need an actual receipt or bank record. Donate Goods You can also donate goods around the holidays. Donations to thrift stores and to charities that qualify as tax-exempt can be a great source of tax deductions. If you have your kids donate some of their toys just before the holidays, you can deduct the fair market value on your taxes if you can claim itemized deductions like home mortgage interest and property taxes. Be aware that for donations over a certain amount, you might need to attach extra paperwork, including sharing the amount you originally paid for the items. When donating to charitable organizations, you can deduct a gift of $250 or more only if you have a statement from the charitable organization showing the amount of money contributed and whether the organization did or did not give you any goods or services in return for your contribution. Understand that you don’t receive a tax deduction for the amount you paid for goods; you only receive a deduction for the current market value as long as the items are in good, usable condition. TurboTax ItsDeductible can help you track and value your charitable donations throughout the year, and then you can transfer your contributions to your tax return at tax time. When you donate the goods, don’t forget to ask for a receipt. Even when donating goods, you need a receipt from the charitable organization. Track Your Mileage If you volunteer your services for a charity this holiday season, you might be able to track the mileage driven in your efforts to help. You can’t receive a deduction for the value of the time you spend working for the charity, but you can get a deduction for the miles you drive. The mileage rate for charity-related driving is $0.14 cents per mile. If you are driving your car in an effort to benefit a charity, make sure that you keep track of the mileage and then deduct it later. This can be one way to reduce the taxes you owe while doing good. Holiday donations can be a great way to help those in need this time of year, and you can also get a tax benefit. You might as well get a financial benefit, even as you help others.Finally, it’s important to note that you can only claim charitable contributions if you claim itemized deductions. If you usually get the standard tax deduction, you may be able to increase your tax deductions by donating so you can itemize and get the larger tax deduction. However, you don’t need to know the difference between standard tax deductions and itemized tax deductions. Meet with a TurboTax Full Service expert who can prepare, sign and file your taxes, so you can be 100% confident your taxes are done right. Start TurboTax Live Full Service today, in English or Spanish, and get your taxes done and off your mind. Get started now Every year around this time, we start thinking about what we plan to do in terms of charitable contributions. For most, there are a few organizations we like to support with cash, and a few we like to support with time. Regardless of how you decide to give, it’s important to keep your taxes in mind so you can save as much as possible when you go to file your return. If the government is willing to give you a tax break as you’re helping others, it makes sense to take advantage of it, right? Here are a few ways to help make sure you’re getting all of the deductions you deserve this year. Table of Contents Save Your ReceiptsDonate GoodsTrack Your Mileage Save Your Receipts If you make a donation and want a tax deduction, you are required to retain a record of that donation. It’s important to realize that acceptable records are those that are “official.” This means a bank record (such as a canceled check or the charity’s name for a debit or credit donation on the bank statement) or a receipt from the charity itself. Bottom line: if you want the tax deduction from your donation, you need an actual receipt or bank record. Donate Goods You can also donate goods around the holidays. Donations to thrift stores and to charities that qualify as tax-exempt can be a great source of tax deductions. If you have your kids donate some of their toys just before the holidays, you can deduct the fair market value on your taxes if you can claim itemized deductions like home mortgage interest and property taxes. Be aware that for donations over a certain amount, you might need to attach extra paperwork, including sharing the amount you originally paid for the items. When donating to charitable organizations, you can deduct a gift of $250 or more only if you have a statement from the charitable organization showing the amount of money contributed and whether the organization did or did not give you any goods or services in return for your contribution. Understand that you don’t receive a tax deduction for the amount you paid for goods; you only receive a deduction for the current market value as long as the items are in good, usable condition. TurboTax ItsDeductible can help you track and value your charitable donations throughout the year, and then you can transfer your contributions to your tax return at tax time. When you donate the goods, don’t forget to ask for a receipt. Even when donating goods, you need a receipt from the charitable organization. Track Your Mileage If you volunteer your services for a charity this holiday season, you might be able to track the mileage driven in your efforts to help. You can’t receive a deduction for the value of the time you spend working for the charity, but you can get a deduction for the miles you drive. The mileage rate for charity-related driving is $0.14 cents per mile. If you are driving your car in an effort to benefit a charity, make sure that you keep track of the mileage and then deduct it later. This can be one way to reduce the taxes you owe while doing good. Holiday donations can be a great way to help those in need this time of year, and you can also get a tax benefit. You might as well get a financial benefit, even as you help others.Finally, it’s important to note that you can only claim charitable contributions if you claim itemized deductions. If you usually get the standard tax deduction, you may be able to increase your tax deductions by donating so you can itemize and get the larger tax deduction. However, you don’t need to know the difference between standard tax deductions and itemized tax deductions. Meet with a TurboTax Full Service expert who can prepare, sign and file your taxes, so you can be 100% confident your taxes are done right. Start TurboTax Live Full Service today, in English or Spanish, and get your taxes done and off your mind. Get started now Every year around this time, we start thinking about what we plan to do in terms of charitable contributions. For most, there are a few organizations we like to support with cash, and a few we like to support with time. Regardless of how you decide to give, it’s important to keep your taxes in mind so you can save as much as possible when you go to file your return. If the government is willing to give you a tax break as you’re helping others, it makes sense to take advantage of it, right? Here are a few ways to help make sure you’re getting all of the deductions you deserve this year. Table of Contents Save Your ReceiptsDonate GoodsTrack Your Mileage Save Your Receipts If you make a donation and want a tax deduction, you are required to retain a record of that donation. It’s important to realize that acceptable records are those that are “official.” This means a bank record (such as a canceled check or the charity’s name for a debit or credit donation on the bank statement) or a receipt from the charity itself. Bottom line: if you want the tax deduction from your donation, you need an actual receipt or bank record. Donate Goods You can also donate goods around the holidays. Donations to thrift stores and to charities that qualify as tax-exempt can be a great source of tax deductions. If you have your kids donate some of their toys just before the holidays, you can deduct the fair market value on your taxes if you can claim itemized deductions like home mortgage interest and property taxes. Be aware that for donations over a certain amount, you might need to attach extra paperwork, including sharing the amount you originally paid for the items. When donating to charitable organizations, you can deduct a gift of $250 or more only if you have a statement from the charitable organization showing the amount of money contributed and whether the organization did or did not give you any goods or services in return for your contribution. Understand that you don’t receive a tax deduction for the amount you paid for goods; you only receive a deduction for the current market value as long as the items are in good, usable condition. TurboTax ItsDeductible can help you track and value your charitable donations throughout the year, and then you can transfer your contributions to your tax return at tax time. When you donate the goods, don’t forget to ask for a receipt. Even when donating goods, you need a receipt from the charitable organization. Track Your Mileage If you volunteer your services for a charity this holiday season, you might be able to track the mileage driven in your efforts to help. You can’t receive a deduction for the value of the time you spend working for the charity, but you can get a deduction for the miles you drive. The mileage rate for charity-related driving is $0.14 cents per mile. If you are driving your car in an effort to benefit a charity, make sure that you keep track of the mileage and then deduct it later. This can be one way to reduce the taxes you owe while doing good. Holiday donations can be a great way to help those in need this time of year, and you can also get a tax benefit. You might as well get a financial benefit, even as you help others.Finally, it’s important to note that you can only claim charitable contributions if you claim itemized deductions. If you usually get the standard tax deduction, you may be able to increase your tax deductions by donating so you can itemize and get the larger tax deduction. However, you don’t need to know the difference between standard tax deductions and itemized tax deductions. Meet with a TurboTax Full Service expert who can prepare, sign and file your taxes, so you can be 100% confident your taxes are done right. Start TurboTax Live Full Service today, in English or Spanish, and get your taxes done and off your mind. Get started now Every year around this time, we start thinking about what we plan to do in terms of charitable contributions. For most, there are a few organizations we like to support with cash, and a few we like to support with time. Regardless of how you decide to give, it’s important to keep your taxes in mind so you can save as much as possible when you go to file your return. If the government is willing to give you a tax break as you’re helping others, it makes sense to take advantage of it, right? Here are a few ways to help make sure you’re getting all of the deductions you deserve this year. Table of Contents Save Your ReceiptsDonate GoodsTrack Your Mileage Save Your Receipts If you make a donation and want a tax deduction, you are required to retain a record of that donation. It’s important to realize that acceptable records are those that are “official.” This means a bank record (such as a canceled check or the charity’s name for a debit or credit donation on the bank statement) or a receipt from the charity itself. Bottom line: if you want the tax deduction from your donation, you need an actual receipt or bank record. Donate Goods You can also donate goods around the holidays. Donations to thrift stores and to charities that qualify as tax-exempt can be a great source of tax deductions. If you have your kids donate some of their toys just before the holidays, you can deduct the fair market value on your taxes if you can claim itemized deductions like home mortgage interest and property taxes. Be aware that for donations over a certain amount, you might need to attach extra paperwork, including sharing the amount you originally paid for the items. When donating to charitable organizations, you can deduct a gift of $250 or more only if you have a statement from the charitable organization showing the amount of money contributed and whether the organization did or did not give you any goods or services in return for your contribution. Understand that you don’t receive a tax deduction for the amount you paid for goods; you only receive a deduction for the current market value as long as the items are in good, usable condition. TurboTax ItsDeductible can help you track and value your charitable donations throughout the year, and then you can transfer your contributions to your tax return at tax time. When you donate the goods, don’t forget to ask for a receipt. Even when donating goods, you need a receipt from the charitable organization. Track Your Mileage If you volunteer your services for a charity this holiday season, you might be able to track the mileage driven in your efforts to help. You can’t receive a deduction for the value of the time you spend working for the charity, but you can get a deduction for the miles you drive. The mileage rate for charity-related driving is $0.14 cents per mile. If you are driving your car in an effort to benefit a charity, make sure that you keep track of the mileage and then deduct it later. This can be one way to reduce the taxes you owe while doing good. Holiday donations can be a great way to help those in need this time of year, and you can also get a tax benefit. You might as well get a financial benefit, even as you help others.Finally, it’s important to note that you can only claim charitable contributions if you claim itemized deductions. If you usually get the standard tax deduction, you may be able to increase your tax deductions by donating so you can itemize and get the larger tax deduction. However, you don’t need to know the difference between standard tax deductions and itemized tax deductions. Meet with a TurboTax Full Service expert who can prepare, sign and file your taxes, so you can be 100% confident your taxes are done right. Start TurboTax Live Full Service today, in English or Spanish, and get your taxes done and off your mind. Get started now Previous Post Top Job Seeker Tax Deductions Next Post 5 End of the Year Tax Tips for Newly Married… Written by Jim Wang More from Jim Wang 72 responses to “Holiday Donations and Tax Savings” « Older Comments Newer Comments » Pls help on this Can mileage plus ExpressToll charges be counted on an itemized form (with doccumented proof) concerning mileage in donating time to charities? Susan, Yes, you can deduct 14 cents per mile or the actual cost of gas and oil plus tolls and parking fees you pay when donating time to charities. My custom is to satisfy the federal tax on an IRA distribution by having the investment company withhold a percentage from the distribution. If I establish a small scholarship at my old college and send the entire distribution directly to the college do I need to have anything withheld for the IRS? The scholarship would be a charitable distribution in my tax return. Also, could such a direct charitable donation be counted against my IRA’s required minimum distribution for the year? Hi Paul, Your distribution will be included on your form 1099R for the year, and will count toward your RMD. If you are donating the entire distribution, and normally itemize deduction (so this would be an increase in your total deductions), your taxable income would not increase and you would not need to have taxes withheld. If you normally take the standard deduction, you should have the taxes withheld because you will not see a deduction for the entire amount of the donation. Mary Ellen Depending on whether your scholarship fund is a single event and other facts, circumstances and goals, there may be several options for tax advantages. You would need to talk with a tax advisor familiar with trusts and estate planning. I have run several 5k races this year where it was for a local charity. The food & shirts that were provided were donated by a sponsor also at the race location, i.e. Panera Bread, or an athletic shoe store. Would the fees of $20 – $35 per race be deductible as I have their 501c 3 charity status and their contact info? I think not. I donated a time-share vacation to a charity. The fair market value is about $1400, what I pay per year (since it’s paid off) is $750. How do I deduct this? Pls help on this fair is fair I actually called the IRS helpline on this. After a string of confused replies I was told this is “a gift of a right to use property” and is therefore NOT deductible. Sandra, My response was for giving the title for the time share to the charity, not just the use of the timeshare for the year. You were given correct information if you donated this year’s time. Mary Ellen Hi Sandra, You will use form 8283 to record information about your contribution. The instructions for the form tell you the information that must be attached to your tax return. Mary Ellen I just recently got a job. I have been receiving unemployment benefit up until September 2013. My spouse is not employed and my daughter is a student. Was it right for me to claim 3 dependents on my W2 for the new job? Yes you are considered the bread winner and your working supporting yourself and two others so yes you can claim three on your w-2s so they don’t take too much taxes out of your checks. yes but more correct for this next 45 days to take 10 or more deductions – you need the money and will owe no tax for this year. 3 would be correct for next years W2. I heard that we can combine the medical expenses from last year with this year. Is that correct? Huyen, You cannot combine two years of expenses on your tax return, unless you pay them in the same year. If you incurred expenses in 2012 and didn’t pay them until 2013, you can deduct them in 2013. If you paid them in 2012, even if by credit card, you would deduct them in 2012. Mary Ellen What is the total amount one can deduct for the year in donated goods? AMOUNT THEY CAN REASONABLY PROVE How come I had over $4,000 in sales tax but was only allowed to write off a small portion of it? can i claim a deduction for a pay day loan i paid off for my daughter? Bernadette, No, the payment of your daughter’s loan is a gift to her, or a loan, and is not deductible. Mary Ellen « Older Comments Newer Comments » Browse Related Articles Tax Deductions and Credits Save with a New Tax Relief Donation Law and Holiday Giving Tax Deductions and Credits Holiday Gift Giving and Tax Deductions Tax Tips How to Donate Your Time, Property, and Cash Tax Deductions and Credits Are Political Donations Tax Deductible? 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Can mileage plus ExpressToll charges be counted on an itemized form (with doccumented proof) concerning mileage in donating time to charities?
Susan, Yes, you can deduct 14 cents per mile or the actual cost of gas and oil plus tolls and parking fees you pay when donating time to charities.
My custom is to satisfy the federal tax on an IRA distribution by having the investment company withhold a percentage from the distribution. If I establish a small scholarship at my old college and send the entire distribution directly to the college do I need to have anything withheld for the IRS? The scholarship would be a charitable distribution in my tax return. Also, could such a direct charitable donation be counted against my IRA’s required minimum distribution for the year?
Hi Paul, Your distribution will be included on your form 1099R for the year, and will count toward your RMD. If you are donating the entire distribution, and normally itemize deduction (so this would be an increase in your total deductions), your taxable income would not increase and you would not need to have taxes withheld. If you normally take the standard deduction, you should have the taxes withheld because you will not see a deduction for the entire amount of the donation. Mary Ellen
Depending on whether your scholarship fund is a single event and other facts, circumstances and goals, there may be several options for tax advantages. You would need to talk with a tax advisor familiar with trusts and estate planning.
I have run several 5k races this year where it was for a local charity. The food & shirts that were provided were donated by a sponsor also at the race location, i.e. Panera Bread, or an athletic shoe store. Would the fees of $20 – $35 per race be deductible as I have their 501c 3 charity status and their contact info?
I donated a time-share vacation to a charity. The fair market value is about $1400, what I pay per year (since it’s paid off) is $750. How do I deduct this?
I actually called the IRS helpline on this. After a string of confused replies I was told this is “a gift of a right to use property” and is therefore NOT deductible.
Sandra, My response was for giving the title for the time share to the charity, not just the use of the timeshare for the year. You were given correct information if you donated this year’s time. Mary Ellen
Hi Sandra, You will use form 8283 to record information about your contribution. The instructions for the form tell you the information that must be attached to your tax return. Mary Ellen
I just recently got a job. I have been receiving unemployment benefit up until September 2013. My spouse is not employed and my daughter is a student. Was it right for me to claim 3 dependents on my W2 for the new job?
Yes you are considered the bread winner and your working supporting yourself and two others so yes you can claim three on your w-2s so they don’t take too much taxes out of your checks.
yes but more correct for this next 45 days to take 10 or more deductions – you need the money and will owe no tax for this year. 3 would be correct for next years W2.
Huyen, You cannot combine two years of expenses on your tax return, unless you pay them in the same year. If you incurred expenses in 2012 and didn’t pay them until 2013, you can deduct them in 2013. If you paid them in 2012, even if by credit card, you would deduct them in 2012. Mary Ellen
Bernadette, No, the payment of your daughter’s loan is a gift to her, or a loan, and is not deductible. Mary Ellen