An individual is typically allowed to claim the total amount that she donated to charity during the tax year as a tax deduction when she files her taxes. However, the IRS has established a series of regulations that limit the total amount that an individual can deduct, which means that these deductions can be extremely confusing for anyone that doesn’t understand the limits.
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The IRS recognises two main types of charities, which includes 50 per cent limit charities such as churches or private research foundations and non-50 per cent limit charities such as fraternities or veteran’s organisations.
An individual may deduct up to 50 per cent of his gross income for any cash or property that he donated to a charity identified as a 50 per cent limit charity.
An individual may deduct up to 30 per cent of her gross income for any capital gains that she donated to a 50 per cent charity or up to 20 per cent for a non-50 per cent charity.
An individual may carry a deduction for a charitable donation over to the following year (for a maximum of 5 years) if the individual filing the return has already claimed the limit.
Non-50 Percent Charities
An individual may deduct up to 30 per cent of his gross income for any cash or property that he donated to any non-50 per cent limit charity.
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