Charitable acts allow us to make a positive impact on society and improve the lives of others. It's also a way to pay it forward, passing on the generosity and kindness we may have received in our times of need.
Once you've given back, you may find that your generosity leads to significant tax savings, allowing you to keep more money in your bank account.
Let’s take a closer look at the tax deductions you can take by giving back.
If you’re over 50, take advantage of massive discounts and financial resources
Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.
How to become a member today:
- Go here, select your free gift, and click “Join Today”
- Create your account (important!) by answering a few simple questions
- Start enjoying your discounts and perks!
Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $12 per year with auto-renewal.
Charitable contribution deduction
When donating cash to a qualified organization, you can typically deduct up to 60% of your adjusted gross income.
If you contribute under $250, you must provide a bank statement or written acknowledgment from the organization.
However, a bank statement isn’t enough for cash donations over $250; you’ll need something in writing from the charity with the date and gift amount.
Local donations
Giving locally allows you to see the direct impact of your contributions. Seeing the results of your donations positively affecting your community can provide a sense of satisfaction and fulfillment.
Donations to local charities and qualified nonprofit organizations are often tax-deductible. Make sure to keep detailed records of your contributions, such as receipts.
Charitable mileage
Unfortunately, you can't claim your time as a tax deduction when volunteering for charitable organizations. However, you can write off travel expenses or mileage on your personal vehicle you use performing services for charity.
The expenses must be for a qualifying charitable organization and can't include significant travel for personal reasons.
Resolve $10,000 or more of your debt
Credit card debt is suffocating. It constantly weighs on your mind and controls every choice you make. You can end up emotionally and even physically drained from it. And even though you make regular payments, it feels like you can never make any progress because of the interest.
National Debt Relief could help you resolve your credit card debt with an affordable plan that works for you. Just tell them your situation, then find out your debt relief options.1
How to get National Debt Relief to help you resolve your debt: Sign up for a free debt assessment here. (Do not skip this step!) By signing up for a free assessment, National Debt Relief can assist you in settling your debt, but only if you schedule the assessment.
Volunteer expenses
Along with travel expenses, you can also write off any other out-of-pocket expenses you incur while volunteering. For example, if you pay for supplies, advertising, or postage for a charity, you can usually deduct them from your taxes.
You may even be able to write off travel expenses related to your volunteer work, including lodging costs and meals.
Qualified charitable distributions
If you're 70 1/2 or older, you can start making qualified charitable distributions (QCD).
A QCD lets you donate money directly from your IRA to a qualified charity. Usually, transfers from an IRA are taxable; however, you can give up to $100,000 each year to charity tax-free with QCDs.
QCDs can also help you meet your required minimum distribution for the year.
Trending Stories
Appreciated assets
Donating appreciated assets, such as stock, bonds, or real estate, can provide significant tax benefits.
When you donate assets that have appreciated, you can typically avoid paying capital gains tax. You can also claim a deduction for the full fair market value of the asset when you donate it, which can reduce your taxable income.
Donation centers
You can give items you no longer use to donation centers like Goodwill and Salvation Army. Some items may include clothing, household goods, or vehicles in good, usable condition.
A professional appraiser can help determine fair market value for high-value items. Don’t forget to ask for a receipt to document your donations!
Charitable contributions of inventory
Businesses can donate surplus inventory to qualified tax-exempt organizations, such as charities, schools, or religious organizations.
You can donate merchandise, office supplies, equipment, and more; however, food inventory is subject to special rules, such as quality and limits to who can eat it.
These donations can reduce waste, provide tax benefits, and showcase the business’ commitment to social responsibility.
Environmental causes
The IRS will also give you tax breaks for donating to organizations that help preserve the environment. You can contribute to many environmental causes, including climate change mitigation, sustainable agriculture, and air and water quality safeguarding.
If you upgrade your home’s energy efficiency, you may also reap some tax incentives. However, these incentives change frequently, so research guidelines before claiming the deductions.
Earn cash back on everyday purchases with this rare account
Want to earn cash back on your everyday purchases without using a credit card? With the Discover®️ Cashback Debit Checking account (member FDIC), you can earn 1% cash back on up to $3,000 in debit card purchases each month!2
With no credit check to apply and no monthly fees to worry about, you can earn nearly passive income on purchases you’re making anyway — up to an extra $360 a year!
This rare checking account has other great perks too, like access to your paycheck up to 2 days early with Early Pay, no minimum deposit or monthly balance requirements, over 60K fee-free ATMs, and the ability to add cash to your account at Walmart stores nationwide.
Don’t leave money on the table — it only takes minutes to apply and it won’t impact your credit score.
Charitable remainder trusts
Charitable remainder trusts (CRT) allow you to donate to causes you care about while drawing an annual income. Transferred assets to a CRT helps you defer income taxes and may give you a partial charitable deduction.
You can name a beneficiary for the trust to receive the payments for the term. Once the payment term ends, the remainder of the CRT goes to your chosen qualified charity.
Local recreation
Donating to local entertainment, such as sports teams, the arts, and community centers, is a great way to support your community's cultural and recreational activities.
Make sure to choose organizations that are registered non-profits so your donations are eligible for tax deductions. If you receive any perks from the organizations, such as free tickets, you’ll need to subtract the value from your write-off.
Conservation easement contributions
The purpose of conservation easement contributions is to preserve open land, historic structures, and natural habitats.
Taxpayers can donate all or part of their property to the government or a qualified charitable organization for conservation purposes and claim the donation as a tax deduction.
Conservation contributions for individuals can’t exceed 50% of their income within a tax year. However, farmers and ranchers can contribute up to 100% of their income.
Research and development tax credit
You don’t need to be a scientist or researcher to earn the research and development (R&D;) tax credit. If you have a small business, you may qualify by simply endeavoring to improve a product or process in the United States.
Sitting down with a tax professional may be worthwhile to discover how your startup could earn the R&D tax credit.
Care for elderly parents
You may be able to deduct expenses for your elderly parents' care, such as prescriptions, medical equipment, nursing home costs, and dental care.
Your parent(s) generally must qualify as a dependent to claim expenses. This means they must meet specific criteria, such as receiving at least half of their support from you and earning a gross income below a certain threshold.
Qualified disaster relief contributions
Contributions to those affected by floods, hurricanes, or other disasters are tax-deductible when made to a qualified organization. These charities can bring food, clothing, shelter, and more to ensure the disaster victims’ basic needs are met.
However, for your donations to be tax-deductible, you can’t earmark your contribution for a specific individual or family.
Bottom line
Giving back can positively impact the lives of others, your community, and the world. It can also help you get ahead financially by reducing your taxable income.
Before donating to a charity, thoroughly research the organization to ensure your contribution is tax deductible and actually goes to the cause.
By making charitable donations a part of your financial plan, you're not only supporting important philanthropic organizations but also optimizing your tax strategy.
Lucrative, Flat-Rate Cash Rewards
FinanceBuzz writers and editors score cards based on a number of objective features as well as our expert editorial assessment. Our partners do not influence how we rate products.
Wells Fargo Active Cash® Card
Current Offer
$200 cash rewards bonus after spending $500 in purchases in the first 3 months
Annual Fee
$0
Rewards Rate
Earn unlimited 2% cash rewards on purchases
Benefits
- Low spend threshold for its welcome offer — $200 cash rewards bonus after spending $500 in purchases in the first 3 months
- Cell phone protection benefit (subject to a $25 deductible)
- Can redeem rewards at an ATM for literal cash
Drawbacks
- Foreign transaction fee of 3%
- No bonus categories
- Select “Apply Now” to take advantage of this specific offer and learn more about product features, terms and conditions.
- Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.
- Earn unlimited 2% cash rewards on purchases.
- 0% intro APR for 12 months from account opening on purchases and qualifying balance transfers. 19.74%, 24.74%, or 29.74% Variable APR thereafter; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min: $5.
- $0 annual fee.
- No categories to track or remember and cash rewards don’t expire as long as your account remains open.
- Find tickets to top sports and entertainment events, book travel, make dinner reservations and more with your complimentary 24/7 Visa Signature® Concierge.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
Subscribe Today
Want extra-cash moves to come right to you?
Stop browsing endlessly. Get proven ways to earn pocket money, help cover rent, and crush your debt — sent to your inbox daily.