Demystify charitable tax deductions for your donors

Each year, as New Year’s Eve draws near, Americans are bombarded by donation requests. Many people answer those solicitations, happily giving to their favorite nonprofits. This generosity also pays off at tax time, as long as donors follow the Internal Revenue Service’s rules on tax deductions for donations. When you help your organization’s donors understand the rules for tax deduction, you make them feel more confident about their donation to your cause.

Here’s what they need to know!

opensourceway / Foter / CC BY-SA

Remind them to itemize

Your donors can give thousands of dollars, but if they claim the standard deduction amount on their tax return, their charitable gifts will not benefit their bottom line. Remind them to itemize expenses on Schedule A to deduct charitable donations. In most cases, there is no limit on how much anyone can deduct.

Timing is everything

Donations must be made by the end of the tax year. If your donors place a check dated Dec. 31 in the mail by that day, they’re in the clear. This rules is the same for credit card transactions!

There are deduction limits

Most nonprofits are known as “50% organizations” because donors’ deductions are limited to 50% of their adjusted gross income. For example, if a donor’s adjusted income is $50,000 and they give $30,000 to your organization, they can’t claim the full charitable gift in the tax year. They can only claim up to $25,000.

However, the other $5,000 isn’t lost! They can claim that excess donation amount on the next year’s tax return. Donors have up to five years’ of “rollovers” to claim the full charitable gift.


FrontStream Holdings LLC is a registered ISO of Elavon, Inc. Georgia, Chase Paymentech Solutions, LLC, First National Bank of Omaha, Omaha, NE, BMO Harris Bank, N.A., Chicago, IL, Deutsche Bank, USA, New York, NY and Wells Fargo Bank, N.A., Walnut Creek, CA.