Charitable Giving Deduction

• The charitable giving deduction allows taxpayers to deduct their charitable donations for up to 50 percent of their income. This means that any donations that you make to qualified organizations during the year will reduce the amount of your taxable income and can save you money. There is no minimum amount to earn to qualify for the deduction, but you do need to itemize, which means your total deductions should be more than the standard deduction. The Internal Revenue Service requires proof of your donation for you to make the claim. You will not send in the receipts but keep them on record in case you are audited.
  
  

Proof of Donations

• The IRS requires that any donations you make go to approved organizations. You cannot deduct donations made to individuals; most churches and many charities are on the IRS list. You can ask your charity if it is approved before you give or check on the list at IRS.gov. You must have a receipt for each donation amount you claim. A canceled check will count as a receipt. However, if you give cash and fail to get a receipt, you will not be able to claim that as a contribution.
  
  

Choosing to Itemize

• You can only claim charitable contributions if you itemize when you file your taxes. You must decide if it is more beneficial to itemize or to take the standard deduction. Only itemize if the total of all of your deductions -- for example, your charitable donations, your mortgage interest and medical bills -- are more than the standard deduction that the IRS offers each taxpayer. If you do not own a home, it is unlikely that you will have enough deductions, even if you give significantly to charity, to justify itemizing and thereby taking the tax deduction for charity.
  
  

State Tax Laws

• Most states offer a charitable tax deduction as well. However, some states may allow you to make the deduction even if you do not itemize when you file your taxes. Your accountant should be able to determine if your state does this; if you file your taxes yourself, read the instructions to find out if you can deduct any charitable donations even if you did not itemize on your taxes. Some states will allow you to deduct a percentage of your donations and not the entire amount.