Only Qualifying Organizations

• To receive an income tax deduction for a donation, your donation must be to a qualifying organization. Qualifying organizations typically include religious, scientific, educational and other charitable groups. You can look up your organization using the IRS Publication 78, which is available online. You cannot make donations to individuals and receive a tax deduction, no matter how needy. For example, if your sister lost her home to a foreclosure because she got laid off and you gave her money for rent, you would not be able to claim an income tax deduction.
  
  

Valuing Your Deduction

• For monetary donations, your deduction is equal to the amount that you contributed. For example, a $5,000 donation would result in a $5,000 deduction. Property donations are more complicated. In general, you can deduct the fair market value of the property you donate. However, the IRS has more complicated laws for valuing donations of vehicles or valuing items that have value and would otherwise be subject to capital gains taxes if you sold it instead of donating it. However, you must reduce your deduction amount by anything you received in return. For example, donating $500 and receive a $20 T-shirt in return would result in a $480 deduction.
  
  

Limits On Deductions

• Your total deduction for your charitable donations cannot exceed 50 percent of your adjusted gross income for the year. For most people, this limit will not come into play. However, if you make a significantly large donation, such as a donation of land, your donation value may exceed the deduction limit. If so, you can carry over the excess into future tax years, up to five years later. For example, if your adjusted gross income in 2012 equals $60,000, but you make a donation of land worth $50,000, you would only be able to deduct $30,000 in 2012. Assuming you have an adjusted gross income of $60,000 the following year, you could write off the remaining $20,000 at that time.
  
  

Claiming Your Charitable Donations

• To claim your deduction for your charitable donations, use Form 1040 and itemize your deductions with Schedule A when you file your income taxes. When you itemize, you cannot claim the standard deduction. On Schedule A, report your monetary donations on line 16 and your nonmonetary donations, such as land or cars, on line 17. For noncash contributions greater than $500, you must complete Form 8283. If you have carryover donations from the previous year, report those on line 18.