Whenever you fill your heart with joy by contributing to a worthy cause, you get the bonus assurance that you’ll see further benefits from the donation come tax time. But the belief is not always well founded, because in the eyes of the IRS, not all charitable donations are created equal.
DollarVersity helps you make sense of tax rules as they relate to charity. Here are some scenarios to consider:
* If you bought tickets to a charitable dinner, you can only deduct the amount above the meal’s cost.
* If you buy a $1,000 charity raffle ticket but end up winning a prize that matches that amount, you can’t deduct any of the $1,000. (Update: Reader Juniper points out that no spending on games of chance can be deducted regardless of whether or not you win).
* If you give a donation but don’t receive anything in return, you can typically deduct the full amount.
Also, if you made a donation in someone else’s name as a gift, you still get the tax benefits of the donation. That means that any donations made in your name aren’t yours for tax purposes.
Charitable Donations Are Not Always Tax Deductions [DollarVersity]