If you donate money to a church or another house of worship, you can generally deduct the donation from your federal taxable income. You must itemize your deductions to claim your church donation. If you make a large donation, make sure to get a receipt from the church if you plan to claim it on your taxes. Special rules apply if you donate stock, cars or especially valuable goods.
Tithing and Taxes
Tithing traditionally refers to a practice of giving a portion of your earnings to the church. It's sometimes seen as a tax paid to the church.
Whether you consider your donations a formal tithe or not, contributions to a church, synagogue, mosque or another house of worship are tax-deductible charitable donations.
You can deduct donations to religious organizations up to 50 percent of your adjusted gross income. Some other categories of charities have lower limits.
The deduction effectively reduces your taxable gross income. To claim charitable donations, you must itemize your deductions. If you would save more by not itemizing your deductions and taking the standard deduction, there's no reason to list a church offering on a tax return.
If you donate more than $250, you must have a written receipt from the house of worship to document your donation. If you donate less than $250, you must have some sort of documentation, which could include a receipt or your bank records if you pay by check or electronically. If you simply put money on an offering plate or otherwise donate cash and don't get a receipt, you generally can't claim the donation on your taxes.
If you're donating something other than cash, such as used clothing or goods, you can claim the fair market value of the item. You should also get a receipt explaining what you donated and when. If you received something in return for the item, you must decrease the value of the contribution by what you received in return. Exceptions apply for admission to religious ceremonies.
If you donate something worth more than $5,000, you must have it professionally appraised to determine how much it's worth. Special rules also apply if you're donating capital assets, such as stock or real estate, or if you're donating a vehicle.
If you have out-of-pocket expenses for doing charitable work, you can deduct those including vehicle mileage or expenses. You can't donate for a donation of your own time, even if you have a useful professional skill.
Church Employee Taxes
If you work for a church or another religious group, special tax rules might apply as far as your income tax.
Some churches have certificates of exemption saying they do not have to pay employer Social Security and Medicare tax. If this applies to your church, you must pay self-employment tax on such income.
Additionally, members of some religious groups are entirely exempt from Social Security tax as conscientious objectors, provided their churches support needy members.
2018 Tax Law Changes
As of 2018, the standard deduction is increasing to $12,000 for single people and married people filing separately, $24,000 for married couples filing jointly and $18,000 for people filing as head of household.
This may mean it's not worth it for many people to document and claim their charitable donations since they'll save more by not itemizing their deductions.
2017 Tax Law Situation
As of 2017, standard deductions were lower, although personal exemptions were also available regardless of whether or not you itemize your deductions.
The standard deduction for individuals and married couples filing separately was $6,350 in 2017. For married couples filing jointly, it was $12,700. For people filing as head of household, it was $6,350.
- IRS: Charitable Contribution Deductions
- IRS: Publication 526 (2017), Charitable Contributions
- IRS: 2017 Instructions for Schedule SE (Form 1040) (2017)
- Forbes: New: IRS Announces 2018 Tax Rates, Standard Deductions, Exemption Amounts And More
- Forbes: IRS Announces 2017 Tax Rates, Standard Deductions, Exemption Amounts And More
- If your total deductions come to more than the standard deduction, your taxes are usually lower if you itemize, according to the IRS. If not, your taxes are usually lower if you don't itemize.
- The IRS database Exempt Organizations Select Check lists many, but not all, qualifying organizations.
- Write the market value of qualifying contributions of property on line 17 of Schedule A. For example, include contributions to charity of electronic goods or clothing. Follow the Schedule A instructions for amounts of more than $500.
- The IRS does not allow deductions for gifts to most foreign organizations.
- In some cases, your deductions for charity are limited to 20, 30 or 50 percent of your adjusted gross income. See Publication 526 if this applies to you.
Steven Melendez is an independent journalist with a background in technology and business. He has written for a variety of business publications including Fast Company, the Wall Street Journal, Innovation Leader and Ad Age. He was awarded the Knight Foundation scholarship to Northwestern University's Medill School of Journalism.