Tax Newsletter

Limits on Tax Deductions for Charitable Contributions

If you made a tax-deductible contribution to a qualified charitable organization, the actual amount you can deduct may be limited to a percentage of your adjusted gross income. The amount that you are entitled to deduct depends on several factors:

• Who you made a contribution to
• What you contributed
• Your income

The 50% Limit

In general, your charitable deduction cannot be more than half of your adjusted gross income. Contributions made to qualified organizations are subject to the 50% limit. These types of organizations include:

• Indian tribal governments
• The United States, District of Columbia, or any state or political subdivision of the U.S.
• Churches
• Educational organizations with a full student body and faculty on site
• Hospitals and research centers

Different rules may apply to contributions of capital gains property (property that would bring long-term income).

The 30% Limit

Your charitable deduction cannot be more than 30% of your adjusted gross income. Contributions subject to the 30% limit include:

• Contributions of capital gains property to any 50% limit organizations (generally)
• Money spent on behalf of a student living with you who was selected by a qualified organization
• Gifts to other qualified organizations besides those subject to the 50% limit
• Gifts other than those that are capital gain property for the use of any organization

The 20% Limit

For some contributions, your deductions cannot be more than 20% of your adjusted gross income. Contributions subject to the 20% limit are all those that are capital gains property gifts to or for the use of a charitable organization, aside from those that fall under the 50% limit.

Note: If you contribute 20% or less of your adjusted gross income, there are no limits to the deduction for your total contributions.

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