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What are the Tax Rules for Charitable Donations in Cleveland?

— February 13, 2023

The IRS is aware of the fact that some people try to be unethical by claiming huge donations as a way of saving money.

Cleveland, OH – It is fairly common for individuals to make some kind of donations throughout the course of each tax year. This can be to a particular cause they support, their religious organization, or various other political entities. Charitable donations are generally deductible, but like other tax rules there are certain regulations that need to be followed and they need to be reported accurately on any tax forms that are filed. Lawyers can give advice to people who make considerable donations annually when it comes time to file taxes. 

Donations and the standard deduction

Many people who file taxes will want to choose the standard deduction for convenience. These individuals and married couples can claim up to $300 and $600 respectively without having to account for specific itemized deductions to charities. However, there are some gifts and private foundation contributions that do not count towards the deduction. Cleveland tax lawyers should be asked questions about how standard deductions can affect charitable donations when filing.

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Total limits on charitable donations as a percentage of income

The IRS also places limitations on the total amount of donations that a person can claim on their taxes. This itemized deduction is capped at between fifty and sixty percent of the adjusted gross income most years.  

Which organizations qualify?

There is an exhaustive list of the types of organizations that can be considered charities for tax purposes that is used by the IRS. This includes the various divisions of government within the U.S., volunteer fire departments, war veteran organizations, most churches and religious organizations, animal rights organizations, and various others. Ohio tax lawyers are available to inform a business or individual whether their contributions are deductible. 

Problems with too many donations 

Some people may either claim to have made significant donations without proof, or they may have asked for a deduction based on their income and donations that seem excessively large or unrealistic. The IRS is aware of the fact that some people try to be unethical by claiming huge donations as a way of saving money. This can result in audits and even fraud charges in cases where the person is intentionally lying and trying to mislead the government. Tax lawyers can help anyone who is actively being investigated or prosecuted by the IRS. 

Setting up trusts and charitable donations

Estate planning lawyers can also be a valuable resource for people who want to set up a trust that pays out to a charitable cause and then receive tax advice about how to claim these contributions. These trusts can be set up while the person is alive, and they can continue to pay out wealth to the cause or organization even after the testator’s death. 

Lawyers can provide more advice can get people connected with local lawyers in their area. Those who want a referral to a licensed attorney in their city or state can call 800-672-3103.

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