Charitable Contributions You Think You Can Claim but Can’t

Laveta Brigham

Not all nonprofit organizations qualify as beneficiaries for tax-lowering gifts, nor do all gifts to eligible charities qualify. Knowing what you can and can’t claim helps you maximize the potential tax savings that the charitable tax deduction offers. Get every deduction you deserve. With TurboTax Deluxe, we’ll search over 350 […]

Not all nonprofit organizations qualify as beneficiaries for tax-lowering gifts, nor do all gifts to eligible charities qualify. Knowing what you can and can’t claim helps you maximize the potential tax savings that the charitable tax deduction offers.

Get every deduction you deserve. With TurboTax Deluxe, we’ll search over 350 tax deductions and credits so you get your maximum refund, guaranteed.

Gifts to a non-qualified charity or nonprofit

As a society, we give nearly 2% of our personal income to charities and nonprofit organizations. However, there is a common misconception that all nonprofits are qualifying charitable organizations — but that isn’t always the case.

For tax purposes, the law classifies charities and nonprofits according to their mission and organizational structure. Each group must register with the IRS for the section of the law that applies to it.

Because the IRS allows deductible donations to some entities that aren’t registered as a 501(c)(3), donors can get confused.

  • For example, taxpayers often have the mistaken belief that civic and employee associations, such as certain retired worker associations and sports groups, qualify as charitable groups.
  • Asking the organization about their qualification before making a contribution is recommended.

A promise to pay

Promised donations do not equate to tax-deductible donations. That pledge you made doesn’t become deductible until you actually give the money. When you agree to contribute $10 per month during a fund-raising drive, only the monthly payments you make during the tax year can be deducted on that year’s return. You cannot claim $120 if you only paid $40.

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