High Income View:

Charitable Contributions

Every man and woman in this world who are able enough to feed themselves on income earned by them should always give to those who don’t share the same luck not out of obligation but because humanity can’t survive on a empty stomach. IRS realizes this and it lets you deduct up to 50% of your adjusted income for charitable contributions. Charitable contributions can be deducted as itemized deductions on Schedule A of form 1040 and on form 8283 for non-cash charitable contributions (gifts with a value over $500).

Charitable Contributions are deductible to the following:

  • Religious organizations like Mosques and Churches
  • Government if it is for public purpose
  • Non-profit schools and hospitals
  • Public parks and other recreational facilities
  • War Veteran’s groups
  • Non-profit organizations that exist for the well being of the less fortunate in society like Red Cross and Salvation Army
  • Boy Scouts and Girl Scouts
  • Boys and Girls Clubs of America

Charitable Contributions that are not deductible:

  • Foreign Organizations (if some of your income source is not from that country)
  • Homeowners’ Association
  • Individuals
  • Political groups or candidates for the public office
  • Groups that are exist for personal profit of few individuals
  • Lobbyist groups in Washington D.C.
  • Civic groups, sport clubs, labor unions, chamber of commerce, and social clubs

The value of the charitable contribution is also important enough to be mentioned here. For example you bought two tickets to a documentary that shows cruelty to animals. A Charitable Organization is showing it at a local movie theater. The film has a running time of two hours like any other movie you would go see in this movie house. The movie house usually charges nine dollars per ticket. This documentary’s tickets cost $50 each. The value of the contribution for deduction is $41. This is minus the fair market value of the movie ticket. For the IRS to consider your contribution a deductible one it must be devoid of any benefit to you.