Charitable Tax Deductions

Have a very merry tax year

Tis the season for year-end giving…and tax benefits. Here are tips for making your donations go as far as possible this holiday season.

Giving is good for everyone.

Charitable donations carry a most appealing benefit— they can make you eligible for potential tax deductions so you can give even more.

The benefit can be substantial. For example, if you are in the 33% tax bracket, a $100 donation to a qualified charity can result in a $33 federal tax break, so the donation only “costs” you $67. (There may be state tax implications, however.) What does that mean to you? If your budget is $100, you could donate more – say, $133 – knowing you may qualify for a refund. Or, you could decide to add another charity to your list. Do the math, and you’ll soon see your personal commitment to giving can have a big impact on your tax benefits and charities when you put your tax savings back into donating.

Make it count.

Ready to incorporate the benefit of tax deductions into your giving? Great, but remember you are only eligible for tax deductions after giving to qualified recipients. For instance, if you give directly to someone in need, you are helping that person, but you won’t be eligible for a tax deduction. For the tax benefit, giving to a charitable organization is a better option.

But, how do you know if the organization is eligible to receive tax-deductible charitable contributions? An inquiry to the charity itself or the IRS should inform you of their tax status. Simply look for IRS recognized charities eligible to receive tax-exempt contributions. There are many online tools that list charities with their tax status like our charity search tool or the IRS itself.

Document your donation.

You need to supply the IRS with tangible evidence of charitable giving when claiming tax deductions — e.g., credit card statements, canceled checks or written acknowledgments from charity groups usually suffice as proof of donation. Donations of $250 or more do require an acknowledgment from the charity. Just be sure you keep up with the documentation and remember deductions are only available in the year you make the donation.

Many people who want to increase their giving impact while making tax-deductible donations turn to donor-advised funds.

Paperwork made easy.

Keeping track of receipts from your charitable donations can prove “taxing” in and of itself. So when the sheer volume of your charitable giving makes keeping track of documentation a daunting prospect, you might want to consider a donor-advised fund like the TIAA Charitable Giving Fund.

The Giving Fund is a different—and more efficient—way to give. Instead of giving to charities one at a time, you open a Giving Fund, put your charitable dollars into the fund (it's an irrevocable contribution, enabling you to be eligible for the most favorable current year tax deductions) and then use your Giving Fund at any time to support your favorite charities. TIAA Charitable takes care of the rest, including sending the checks. The goal of this approach to charitable giving is to help you simplify your paperwork, benefit from the advantageous tax treatment, give your charitable contributions the potential to grow and make a bigger impact with your giving.

There’s more you can give than money.

Rather than throw out old furniture, clothes and equipment…why not donate them to charity since non-cash gifts may also be qualified for tax deductions?

And back to the advantages of a donor-advised fund, here’s another. Most large donor-advised funds accept contributions other than cash, like appreciated securities.

The tax benefits of gifting appreciated securities may be substantial — and could include deducting the full fair market value (up to certain applicable adjusted gross income limits), avoiding unrealized capital gains and the ability to carry forward any unused deductions for up to five years. Before opening a fund, be sure to check that your contribution type is accepted and work with your tax accountant or advisor to confirm suitability and tax benefits.

As you can see, there are many ways to give and help others while helping your tax situation. Just do a little research to find what’s best for you.

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Charitable Tax Deductions

Your Giving Fund can help you be more strategic about taxes. Not only can it make things a lot easier come tax season, you may be eligible for charitable tax deductions and benefits that can help both you and, ultimately, the charities your Giving Fund supports.

Learn more about tax benefits

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Charitable deductions are subject to Internal Revenue Code limitations, based generally on your adjusted gross income and the character of any securities you contribute to your Giving Fund. There may also be state and local tax benefits to making contributions, but the content provided here relates to taxation at the federal level only. Availability of certain federal income tax deductions may depend on whether you itemize deductions.

Contributions to the Giving Fund are irrevocable. All recommendations from donors are subject to review and approval by TIAA Charitable.

TIAA Charitable does not provide tax advice. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.

TIAA Charitable is the brand name for an independent public charity that maintains a donor-advised fund program. The TIAA name is a registered mark of Teachers Insurance and Annuity Association of America and is used by TIAA Charitable pursuant to a license.

TIAA Charitable, Inc. has been recognized by the Internal Revenue Service as a tax-exempt public charity under Sections 501(c)(3) and 170(b)(1)(A)(vi) of the Internal Revenue Code of 1986, as amended (the “Code”).