"In-kind" donations to charity include everything from giving away your car to building a Habitat for Humanity home. Cash donations are straightforward: You give money, you claim a deduction. When you give something other than cash, figuring out how much you can deduct -- or if you can claim any deduction at all -- becomes more complicated.
If you donate time and effort to charity -- running an auction, delivering food, building a house or giving blood -- your only reward is the good that you do, because you can't write off your donation. Even if you take time off from work, the lost income is not deductible. You can, however, claim related expenses such as a per-mile deduction for driving to the place where you donated your time. If the charity reimburses your expenses, you can't claim them.
If you make a non-cash donation -- free use of your rental for a weekend, your old computer, food -- you claim the fair market value of the property as a deduction. For household items, such as clothes or furniture, the property must be in good condition for you to claim a deduction. With more valuable items, such as an antique pendant, you need an appraisal to prove it's worth the amount you claim.
If you know you're going to claim a deduction, keep the paperwork to support it. If you claim travel to and from a charity event, record the mileage and the reason for the trip. When you donate property, get a receipt with a reasonably detailed description of the property. The more generous your in-kind donation, the more paperwork you need. For a donation of property worth more than $500, for instance, you need to note when and how you came into possession of the property in addition to your receipt.
To write off your contributions, you have to itemize deductions on Schedule A rather than take the standard deduction. Before claiming the deduction, subtract any benefit you received from the charity, such as a thank-you gift for your help. No matter how generously you give, you can't claim a total deduction greater than 50 percent of your total income. In some cases you can only claim 30 percent or 20 percent, depending on the kind of organization you donate to.
- Tax Deductibility of Designated Gifts
- What are the Tax Breaks for Donating to Charity?
- When Do I Need a Receipt for a Cash Charitable Contribution?
- Ideas on Non-Cash Donations
- What Is the Maximum Deduction Allowed Without Receipts for Donated Items?
- How Much Can a Married Couple Claim for Donations on Their Taxes?