This IRS maximum donation limit article has been updated with information for the 2023 and 2024 tax years. Ever wonder if there was a maximum limit to how much you can donate to charity and deduct from your taxable income? Believe it or not, the IRS has charitable donation limit maximums. And, for those who are charitable, there can be large tax implications to understanding these rules.
While reaching the maximum donation limit may not seem like something you’d ever encounter, it would be wise to not completely write off that possibility. If you intend to donate a large cash or high value non-cash amount to a qualified 501(c)(3), it is in your best interest to get the full allowable tax deduction for your generosity. And if you don’t itemize your taxes, you may want to hold off on donating altogether.
This is an area that I have particular expertise in, as I worked in fundraising for a non-profit for 3 years. So, let’s get started with the basics.
Are All Donations Tax Deductible?
No. The IRS only allows you to deduct donations from your taxable income if the donation was made to a qualified tax-exempt organization. 501(c)(3) organizations are included, but other types of orgs are as well. Make sure you do your research to determine if the organization you would like to donate to is tax exempt. The big exceptions are that contributions made to political campaigns or organizations or for-profit organizations are not qualified charitable contributions, and are not tax deductible.
What is the Maximum Charitable Donation Limit Per Year?
This is where things get a bit tricky. There are maximum IRS charitable donation amounts, but they are a percentage and not a defined dollar amount. The percentages are based off what you donate and who you donate it to, with a maximum qualified charitable contribution of 60% of your adjusted gross income.
According to IRS publication 526 (the gospel for qualified charitable contributions):
The amount you can deduct for charitable contributions generally is limited to no more than 60% of your adjusted gross income. Your deduction may be further limited to 50%, 30%, or 20% of your adjusted gross income, depending on the type of property you give and the type of organization you give it to.
See that form and the instructions in the itemized deductions worksheet for more info on how much you can deduct.
In practical terms, at a minimum, you will be able to deduct 20% of your AGI. At a maximum, you will be able to deduct 60%. If your donation totals less than 20% of your AGI (the case for the overwhelming majority of people), then don’t worry about all of the details. Deduct and move on.
2020 & 2021 Updates: with the CARES Act legislation providing a number of financial COVID relief measures, those who itemized taxes could deduct up to 100% of adjusted gross income in 2020 and 2021 for cash contributions. If you give more than your AGI, the excess deduction amount can roll over to next year, as previously (up to 5 years). Separately, there was also new universal charitable donation deduction provision for those who do not itemize their taxes for 2020, and the 2021 maximum universal charitable donation deduction was increased further to $600 for “married filing jointly” and $300 for “married filing separately” filers (this donation deduction is no longer active after 2021 – see below).
2022, 2023, & 2024 Updates:
- The temporarily increased AGI percentage deduction is no longer available for 2022, 2023, and 2024.
- The universal tax donation deduction has expired and is not active in 2022, 2023, and 2024 – meaning non-itemizers can no longer claim this deduction.
What if you Donate More than the IRS Limit? Can you Carry Over Donations to Future Years?
Yes. You can carry over deductions from any year in which you surpass the IRS charitable donation deduction limits, up to a maximum of 5 years. The same percentage limits discussed earlier apply to the year that you carry over the donation amounts to.
Your total charitable deduction for the year to which you carry your contributions can’t exceed 60% of your adjusted gross income for that year.
Can you Deduct Charitable Contributions if you Don’t Itemize your Taxes?
In order to deduct a charitable contribution, you must itemize your taxes.
With increased standard deductions, very few American taxpayers will itemize their taxes, and opt for the standard deduction instead. If you take the standard deduction, you can’t deduct charitable contributions.
The Republican Tax Reform Impact on Charitable Deductions
I wrote about this at length, but the Republican “Tax Cuts and Jobs Act” (aka “Republican tax reform” will create a charitable donation deduction crash, because the standard deduction was increased starting in 2018.
This will dramatically reduce the number of itemized filers, which will reduce the incentive to make charitable donations (but you still should, because you’re a good person and stuff).
2023 standard deductions are:
- $13,850 for single filers
- $13,850 for married, filing separately
- $27,700 for married filing jointly
- $20,800 for head of household
2024 standard deductions are:
- $14,600 for single filers
- $14,600 for married, filing separately
- $29,200 for married filing jointly
- $21,900 for head of household
I can’t overstate how important this is to your tax strategy. If you have a low deduction year, in which you think you will take the standard deduction, it might be wise to hold off on donating until you have a higher deduction year (e.g. one with significant deductions like mortgage interest, education deductions, and property taxes).
What Proof do you Need to Claim a Charitable Donation?
By default, always at least get written confirmation for your donation. I won’t get in to the full details here, since I have previously gone in to depth about cash and non-cash scenarios where you need a charitable donation receipt, appraisal, or no written acknowledgement at all in order to deduct a donation. It’s important, so read up. IRS publication 561 is also a valuable read.
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Thanks for the great work and service that your do.
FYI, you can donate assets (money e.g., cash or check, real property, etc) to not for profit organizations that have not filed for 501(c)(3) status (other than political organizations and political campaigns that you noted).
Religious organizations (churches, Abbys, Convents, Monistaries, etc.) are exempt from the requirement to file for 501(c)(3) status and tax payers can donate to them and take the donation as a charitable deduction on their Federal Tax Return. This information is covered in year four.
Yes, that is correct. Updated language to note that 501c3’s are tax exempt, but some other orgs are as well. Best bet is to do your research and check the org through the IRS tool I linked to.
Wow, great point. I never thought about timing my donations so that I am using them in a year when I am doing an itemized deduction rather than a standard deduction. So far, I’ve only ever used the standard deduction because it is more.
My tax person claims we can only get credit for a total of $400 non-cash charity donations even though we have claimed over $600 worth and have the records to show it. What would limit the non-cash donations allowed if the AGI rule is followed? I’ve searched the web and can’t seem to find an answer.
is 5000 the limit per year for non cash doantion to charitable thrift stores like goodwill without appraisal. or is it per visit or per thrift store. Like im moving and getting rid of a ton of stuff and itemized it will equal over 5000.00 can i split it up or do i need to get an appraisal on the items and how do i get an appraisal on a truck load of small priced items that add up to over $5000.00
I am in a similar situation and would like to know the same answers as Sara.
I too am like Sara and Bj. How do I find out the answer to their questions which will also answer mine?
Same here!
I too would like to know the answer to Sara Hansen and Bj’s question. Thank you!
Me too
G.E., – one correction: max deduction for cash gifts is now 60%, not 50%. This blog provides a link to the source: https://www.tandllaw.com/blog/good-news-year-end-tax-legislation-increases-contribution-limits-gifts-cash-public-charities-private-foundations-60-taxpayers-contribution-base/.
Also, no need to postpone charitable gifts in a low deduction year. A better strategy is to accelerate and fund a donor-advised fund for example so you can lump all future donations into the fund and distribute when you want to. In the meantime, you can invest anyway you like.
i thought 2018 tax law changes eliminated all phase out limits for charitable contributions, correct?
Itemized Deductions Phase-Out Amounts
The TCJA suspended the overall limitation on itemized deductions for tax years beginning after December 31, 2017 through December 31, 2025. Accordingly, itemized deductions are not reduced for higher-income taxpayers.
I’m taking this course for my CPE credits and found this answer.
If someone wants to give me a 2million dollar building, can he deduct it as a donation?
I distribute donations every year through a Donor advised charitable fund, but I contribute to this fund only on a year I itemize. So if I have the funds available, I’ll contribute enough that year to surpass the standard deduction and make itemizing worth it, while the following years I will take the standard deduction, but still be able to support charities. Added benefit- the fund will invest that money tax free, until I grant it.