Like most Americans, when it comes to filing your tax returns, you’re likely interested in any credits or deductions that might help reduce your tax liability and increase your return -- or reduce your bill. Charitable contributions you make throughout the year can be deducted from your income, if certain requirements are met. These might include contributions made by your dependents.
Contributions Made in Your Dependent’s Name
You are only allowed to deduct contributions made to a qualifying charitable organization. That said, you can deduct contributions you make in someone else’s name. So if you donated a certain amount of money to XYZ charity in your child’s name, for example, you would be able to deduct this amount on your taxes, as long as the deduction requirements are met. You will need to keep accurate records of the payment along with the receipt from the organization to prove you financed the donation.
Contributions Your Dependent Makes
The IRS only allows you to deduct charitable contributions that you personally funded, whether the contribution was made in your name or in someone else's. If your child or dependent makes a donation to a charity, you are not allowed to claim it as a tax deduction. This is true even if your dependent does not claim the contribution on his own tax return because he opts for the standard deduction rather than itemizing or claims exemption.
Non-Cash Contributions Your Dependent Makes
If you donate non-cash items such as household goods or even a car, you may be able to claim these on your taxes if you originally financed the items. For instance, if you purchased children’s clothing and then donated them to charity, you can deduct these from your taxes. However, if your child purchases a car and then donates it to charity as the titled owner, you would not be able to deduct this. Keep in mind, too, that you will need a professional appraisal to claim any non-cash contributions of more than $500.
To deduct any charitable contributions -- whether made in your name or made in your dependent’s name -- you will need to meet certain requirements from the IRS. First, you must itemize your deductions rather than taking the standard deduction. Second, you can only deduct contributions made to IRS-recognized charitable organizations. A list of these is available on the IRS website. You will also need to keep detailed records of your donations, including bank statements, payroll deduction records, receipts and other pertinent documentation. While you do not submit these with your tax return, the IRS requires you to maintain the records in case of an audit.
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