Monthly Archives: March 2017

Tax Exempt Organization Does Not Always Equal Tax Deductible Contribution


I saw this sign as I was driving home a few weeks ago and thought “Yikes!” Your neighborhood association dues, homeowners association dues, and many other payments or contributions to tax exempt organizations are not tax deductible. For a donation to be tax deductible it must be made to a recognized 501(c)(3) charitable organization. If you make your donation by cash or check those organizations will almost always provide you with a letter that acknowledges the contribution. If you received goods and/or services in return for the donation, the amount of goods or services will also be noted on the letter. You can only deduct the amount in excess of the goods or services received. Raffle tickets and purchases of auction items are also not deductible, no matter how worthy the cause. You also may not deduct contributions made to individuals (via gofundme or other types of crowdfunding) or contributions made to charitable organizations outside the U.S. (again, to be deductible the organization must be a 501(c)(3)).

Also please remember that if you take the standard deduction (you do not itemize your deductions on Schedule A) you cannot deduct your charitable contributions. Donate if you want to, but don’t ever make a donation just to save money on taxes. Your donation may not be deductible and, as I mentioned in this post, it is not a dollar for dollar savings.

If you have tax questions it’s always better to ask your #taxpro than to trust what you hear or read. Sometimes even trustworthy sources provide bad information!