Donating to your favorite charity is a fantastic way to give back, and if you itemize deductions come tax time, you can benefit, too. In many cases, it’s possible to deduct charitable donations, which can contribute to your own financial security. Here, a tax advisor from North Carolina’s Sharrard, McGee & Co., PA answers some of the most frequently asked questions about the tax advantages of charitable giving. 

Common Questions About Deducting Charitable Donations 

How Do You Deduct Charitable Donations?

Typically, you can deduct all donations made to qualified charities by itemizing deductions on your federal tax return. To check if gifts to a particular charity are deductible, search for the organization on the IRS website.

Can You Deduct More Than Just Monetary Donations?

If you volunteer for a qualifying organization, you may deduct expenses, like gas mileage and parking. Simply save all receipts and documentation for such costs to give your tax advisor when the time comes. 

Is There a Limit to How Much You Can Deduct?

In most cases, you can deduct up to 50% of your adjusted gross income in charitable donations; however, there are exceptions. For example, deductible contributions to certain private foundations, fraternal societies, cemetery organizations, and veterans’ organizations are limited to 30% of your gross income. Exceptions also apply to donations of long-term capital gain property. 

When Must the Transaction Be Completed?

Contributions must be finalized, which means paid in cash or other property, by the close of the tax year. If the transaction is not completed by the end of the year for which you are filing, you cannot deduct it in that year’s return. 

If you want to learn more about the tax implications of donating to your favorite charities, turn to a tax advisor at Sharrard, McGee & Co., PA. With one office in High Point and another in Greensboro, this North Carolina firm provides comprehensive accounting and tax services for both individual and commercial clients throughout the Piedmont Triad region. They have been assisting with everything from consulting and advisory services to bookkeeping for 40 years. Visit their website to explore all the services they provide, and then call (336) 272-9777 to make an appointment with a tax advisor in Greensboro or (336) 884-0410 in High Point.