Video: Charitable Tax Deductions: How to Save on Your Taxes
Knowing the IRS rules behind charitable contributions can help you save money. Lisa Greene-Lewis, CPA and TurboTax tax expert, explains what you need to know.
Video Transcript
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[00:00:04.92] TRACY BYRNES: So one of the beauties of post-pandemic is that so many people are so charitable these days. And we see it in all corners of our fine Earth. But how do you get a deduction back for that? How do you get a little credit from Uncle Sam for being so generous?
[00:00:18.69] Well, you can. Lisa Greene Lewis, CPA and TurboTax expert is here with us right now. Lisa, look, people have been very kind and generous over these last few years. But I think they often forget about some of the things they do. So what are some of the charitable things that people have done that they forget to deduct on their tax return?
[00:00:37.44] LISA GREENE LEWIS: Yes, so if people are volunteering, that's one that they need to think about for the mileage that they drove to volunteer. They get $0.14 per mile. You don't get the hours. There's no hourly rate for volunteering. But definitely include your mileage, any supplies that you donated to the charity. Even travel can be deductible. Like, if you traveled to another state to help with a disaster or anything like that.
[00:01:07.20] TRACY BYRNES: We were talking off camera about donating the casserole to the church. But there's always bake sales and there's things like that. And people often forget that the ingredients in all that stuff can be deductible.
[00:01:18.13] LISA GREENE LEWIS: Yes, that's right. Any ingredients, anything you make, or any type of supplies that you provide for the charity would be deductible.
[00:01:29.23] TRACY BYRNES: So there's obvious charitable donations, right? You write a check. You put a check in the basket at church. You get receipts back. What kind of documentation do you need to prove to the IRS that you were, indeed, generous?
[00:01:41.67] LISA GREENE LEWIS: Yes, so if it's $250 or more, you should get an acknowledgment from the organization that you contributed to. And then you also want to make sure that it's a 501(c)(3) organization. That's one that's recognized by the IRS as a charitable organization.
[00:02:03.06] TRACY BYRNES: Which brings us to all these GoFundMe accounts that have been opened over the years, and for very good causes. But sadly making a contribution to them is not a deduction, is it?
[00:02:14.43] LISA GREENE LEWIS: No, it's not. Not if they're not recognized as a 501(c)(3) organization. It would not be, unfortunately.
[00:02:23.37] TRACY BYRNES: So Lisa, what if over the course of the year we donated clothes to charity or even small furniture, how do I know what amount to take on my tax return?
[00:02:34.70] LISA GREENE LEWIS: Yes, so we have Turbotax Deductible. And that will value and track your charitable contributions year round. And then that information imports into your tax return so you don't have to worry about individually typing everything in.
[00:02:51.98] TRACY BYRNES: There are definitely websites. TurboTax could help you with this. But make sure when you do make a donation to an organization you haven't heard of-- we all know the Red Cross, the American Cancer Society, things like that. But if it's an organization you don't know well, be sure to check it out before you take the deduction on your tax return. Lisa Greene Lewis, TurboTax expert and CPA, thank you for all of that.
[00:03:13.91] LISA GREENE LEWIS: Thank you for having me.
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