Charitable contributions are a great way to give back not only to your community, but to yourself around tax time! The IRS allows taxpayers to itemize charitable contributions in order to write them off–in most cases, you’re allowed to write off up to 60% of your Adjusted Gross Income. This number was changed to 100% of your AGI for cash contributions due to the COVID-19 pandemic, but that expires after the 2021 tax year, unless the government enacts an extension of that rule change before the end of the 2022 tax year, which as of this article’s publishing, it has not.

It’s important to note that charitable contributions can only be deducted if you are itemizing your deductions. For those taking the standard deduction, up to $300 may be deducted for single taxpayers and $600 for those filing jointly.

What Can Be Deducted?

While cash donated to a public charity can be deducted up to 60% of your AGI, property donated to a charity can be deducted at fair market value up to 30% of your AGI. Combining more than one type of asset is often a tax-efficient move that can help maximize what you’re able to deduct.

A contribution must meet a few qualifications for it to be deductible:

  • It must be made to a registered 501(c)(3) public charity or private foundation
  • A record must be kept of the contribution, usually in the form of a tax receipt from the charity.
  • If it’s a property donation, you might have to obtain a qualified appraisal in order to deduct the fair market value of the property.

If you own shares of stock in a private S-corp or C-corp, that can be donated and written off as well the same way that property is deducted. This only depends on the receiving charity’s ability to accept private stock as a contribution.