Know your limits
Most public charities are known as 50% organizations. They get this name because donors' deductions are limited to 50% of their adjusted gross income. For example, if your adjusted income is $50,000 and you give $30,000 to a qualifying nonprofit, you can't claim your full charitable gift in the tax year in which you give. You can claim only up to $25,000.
However, the other $5,000 isn't lost. You can claim the excess donation amount on your next year's tax return. You have up to 5 years of "rollovers" to claim the full charitable gift.
Most of us won't have to worry about this limit, but in case you come into some unexpected cash and want to share it with a charity, take into account the deduction limit.
There also are 20% and 30% donation deduction limits for specific gifts and the groups -- typically private charities -- that receive them. These rules are more complicated, so you should talk to a tax professional if you're planning a gift that falls into this category.
Get receipts
Regardless of the type of gift, its amount and to which charity you donate it, get a receipt.
The IRS actually demands receipts when a donation is more than $250. In some cases, appraisals also are required.
In most cases, the receipts are for your records only, just in case the IRS later has questions about your deduction. If you don't get a receipt or other formal acknowledgment from the charity when you donate, ask for one.
A legitimate tax-exempt organization will have no problem giving you a receipt when you make your donation or later mailing (or emailing) one to you.
Now that you know the IRS rules on tax deductions for donations, all you have to do is decide which charities get your year-end contributions.
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