Giving to charity not only helps those in need of your gift, it also may provide you with some benefits at tax time. One of our charity’s supporters, CPA Eugene A. Cohen, explains.

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This information is for educational purposes only and does not constitute any kind or type of tax or legal advice.

Q: How can I save on my income taxes by making a charitable contribution?

A: The tax law permits an itemized deduction on your Schedule A, itemized deductions up to 100% of your AGI, adjusted gross income, for 2021. If you don’t itemize your deductions, you can still deduct $300 or $600 if married against your income.

Q: How do I know if my contribution is deductible?

A: Your deduction must meet certain requirements before becoming deductible: The charity must be an approved charity, usually a 501 (C)(3). You can check the IRS website to see if your charity is listed. Churches, synagogues, mosques, temples, and government agencies are allowed even if not on the list. You can make your contribution by cash, check, credit or debit cards and out of pocket unreimbursed expenses in connection with volunteer services.

Q: Can I make a noncash contribution?

A: Yes. The IRS allows noncash contributions, these items can be clothing, food, household items and even a car. Your deduction is based on the “Fair Market Value” of what you are contributing. Typically, the items you donate to goodwill will generally fall into this category. Always ask for a receipt and list the items you have donated. For gifts valued over$ 500 and less than $5,000 you need to file a form 8283 with your tax return. Donations valued over $5,000 will need an appraisal attached.

This information is for educational purposes only and does not constitute any kind or type of tax or legal advice.

To learn more about taking charitable deductions, email Gene at Gene@Sstarcpa.com.

Eugene A. Cohen, CPA,
A PROFESSIONAL CORPORATION
5245 Allott Ave.
Sherman Oaks, CA 91401