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Categories: General Tax Terms

Charitable Contribution

A charitable contribution is a donation or gift made to a qualified organization that is recognized as tax-exempt under Internal Revenue Code Section 501(c)(3). These contributions can be in the form of cash, property, or services and are typically made for religious, educational, scientific, or charitable purposes.

For tax purposes, individuals and businesses can often deduct the value of their charitable contributions from their taxable income, subject to certain limitations and requirements. For instance, an individual can generally deduct up to 60% of their adjusted gross income (AGI) for cash contributions made to qualifying charities.

Examples of qualified charitable organizations include nonprofit organizations, educational institutions, and churches. It’s important for donors to retain proper documentation, such as receipts or bank statements, to substantiate their deductions when filing taxes.

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