If you regularly donate to charity, you may want to take advantage of the charitable deduction, an incentive that could significantly reduce your taxable income.
This article explains what the charitable deduction is, how it works, and what to consider as you prepare to file your return for the 2025 tax year.
A charitable donation is a voluntary donation to a tax-exempt organization, for which you received no benefit in return. The gift may be money or property, such as a car, clothing or furniture. You may also be able to deduct certain expenses related to volunteer work.
However, a charitable donation has a major particularity: it is not reserved for individual use.
“Gifts to individuals, such as GoFundMe campaigns for medical bills, are not eligible,” said Gregory Monaco, CPA and founding director of Monaco CPA, in an email to Yahoo Finance. “For example, if you write a check to a church for a specific person, such as ‘for the Johnson family,’ or if the charity sends your donation to someone of your choice, the IRS considers it a personal gift and not a charitable contribution.”
Tax-exempt organizations must meet Internal Revenue Service (IRS) requirements. The IRS includes these groups in its list of qualified organizations:
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United States-based charities
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US government entities
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Veterans groups
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Fraternal societies
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Nonprofit cemeteries
Donations to qualified, tax-exempt organizations are tax deductible up to a percentage of your adjusted gross income (AGI), which is all the money you earn in income minus certain adjustments.
Generally, you can deduct up to 60% of your AGI. However, depending on the type of contribution and the organization, you might be limited to 50%, 30%, or even 20% of your AGI.
Filers can generally deduct the most for gifts to organizations that fall within the “50% limit” category defined by the IRS. This includes churches, schools, hospitals and other public charities and foundations. Donations to qualified organizations outside of this category have lower limits.
Your deductible limit also depends on whether the gift was cash or property, and whether the property has capital gains. Deduction limits may be lower if you make gifts in different IRS categories in a given tax year.
If you reach your limit and still have gifts to deduct, you may be able to claim these deductions in future years, for up to five years, in what’s called a carryover.
Filers who itemize deductions can claim the charitable tax deduction. It is currently not available to non-users, but changes are expected for 2026.
Compared to the standard deduction, itemizing can be more complex and costly. However, the IRS recommends itemizing if your itemized deduction is above the standard or if you need to itemize for other reasons.
Learn more: Standard or detailed deduction: how to decide
These steps can simplify claiming the charitable deduction. Always consult a tax professional with any questions regarding your situation.
You will need documentation for all your contributions. This can be as simple as a bank statement or as complicated as a Contemporaneous Written Acknowledgment (CWA) – a letter from the charity stating the date and amount of your contribution and whether there has been an exchange of goods or services.
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For cash contributions: Include a bank statement, funds transfer receipt, canceled check or payroll deduction records for gifts under $250. Cash donations of $250 or more require a CWA.
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For non-monetary deductions: If the value of the donation is less than $250, have a detailed receipt with the name and address of the organization, the date and location where you made the donation as well as the details of the donated goods. Donations of $250 or more require a CWA and, potentially, additional tax forms.
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For personal expenses: Similar to cash contributions, you can use a bank statement or receipt for eligible, unreimbursed personal expenses under $250. If you are claiming $250 or more, you will need a receipt from the organization.
The IRS requires most tax-exempt organizations to submit information annually to maintain their status. If the organization fails to do so for three consecutive years, it automatically loses its tax-exempt status, meaning you cannot deduct donations made to it.
It’s a good idea to check the status of an organization at the start of the year, but especially before you file your tax return. Use the SRI online tool to search for the entity name or employer identification number (EIN).
When you itemize your return, you indicate the tax-deductible expenses you incurred throughout the year, such as health savings account contributions, interest on student loansand charitable giving – but it doesn’t always make sense for everyone.
“You can only get a tax break for charitable donations if your total itemized deductions are greater than the standard deduction,” Monaco noted. “About 90 percent of people don’t exceed the standard deduction limits, so their donations don’t reduce their federal taxes.”
Here are the standard deduction limits for tax years 2025 and 2026:
File and submit before the deadline
Include the amount of your charitable donations made during the tax year using IRS Form 1040, Schedule A, on lines 11 and 12. If you carry forward an amount from previous years, enter it on line 13.
Be sure to file your taxes or request an extension by April 15.
The One Big Beautiful Bill Act makes changes to charitable tax deductions beginning in tax year 2026 (to be filed in April 2027). Changes include:
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Those who take the standard deduction can claim up to $1,000 in charitable contributions if filing single, or $2,000 if married filing jointly. This means that even if you don’t itemize, you can take a limited deduction for charitable contributions.
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If you itemize, charitable contributions are only tax deductible if they exceed 0.5% of the filer’s AGI. This new provision creates a “floor” on what is deductible.
The Tax Foundation offers this example: If a taxpayer with $200,000 in AGI makes $10,000 in charitable donations, the first $1,000 of donations would not be deductible. But anything over that amount — in this case, the remaining $9,000 — would be.
How much you save will depend on several factors, like the type and amount of your gift, your tax bracket, and your AGI. There are also limits to the amount you can deduct. Common cash donations are generally limited to 60% of your AGI, but other types may have lower deduction limits. The amount you’re allowed to deduct reduces your taxable income, which often results in a lower tax bill.
For tax year 2025, you can only deduct charitable donations if you itemize them. However, starting in 2026, single taxpayers who take the standard deduction will also be able to claim charitable donations, up to $1,000 for single filers and up to $2,000 for married spouses.
Donating to charity to write off your donation does not mean add money to your bottom line – this reduces the income you are taxed on. If you choose to donate to a cause you care about, you can consider the deduction a bonus.
From 2026, you will no longer need to itemize to claim the charitable tax deduction. Those who take the standard deduction can claim up to $1,000 as a single filer (or $2,000 if married filing jointly). Items, on the other hand, will see new restrictions on what they can deduct, particularly donations exceeding 0.5% of their AGI.
