Business & Finance Taxes

How to Calculate Deductions For Giving to Charity

    • 1). Check that the organization that you are making a donation to is a qualifying organization. The IRS has an online database (see Resources) of organizations that qualify. If the organization you donated to is not listed, you cannot take a deduction.

    • 2). Calculate the amount of your donation by adding the value of each item donated. If you are making a cash donation, the value of the donation is simple to figure out. With property, the calculation can be more tricky because you have to document the fair market value of your donated goods. Some charities, such as Goodwill, publish a list of items along with their values (see Resources) so you can ask your charity for this information. If you donate an item believed to be over $5,000, you must have it valued by an appraiser.

    • 3). Calculate the value of any tangible items you received in return for your donation. For example, some charities may reward donors with a T-shirt, commemorative memorabilia or other tangible items.

    • 4). Subtract the value of anything you receive in return from the amount of your donation to calculate the value of your deduction. For example, if you gave $1,000 and were treated to a free donor's dinner valued at $60, you would be able to deduct $960.

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