tax deduction for charity donation?

Question

last year I bought and donated about $150 worth of items. if I report this on my tax return, exactly how does this work as a deduction? do I get back the taxes I paid on the items or the $150 or what?

what I'm asking is how that a donation worth $150 affects how much money I'll get back

Answer 1

Assuming you have enough total itemized deductions (excess of 7.5% AGI on medical, mortgage interest, property taxes, as well as charitable donations) to exceed your standard deduction (depending on your filing status):

The amount of that deduction will depend on what tax bracket your income falls into. Assuming you're in the 25% bracket, that $150 donation in new, unopened items is the equivalent to a reduction of $38 in your tax liability. So, in a sense, you actually paid $112 on those donated items.

The sales tax you paid on the items is a completely different situation, whether you paid enough in sales tax throughout the year and can conclusively prove that you paid for it that you can deduct it. Unless you also paid for some big ticket item, most people won't go through the trouble of taking that deduction.

Answer 2

Charitable donations go on Schedule A - Itemized Deductions. You have the choice of either using itemized or the standard deduction. The standard depends on your filing status, if you're single, your standard is 5150. if you're married filing joint, it's 10,300. If you don't have any other itemized deductions besides your charitable contributions, then it's better to stick with the standard deduction. (other itemtizations include, unreimbursed business expenses (uniforms, boots, union dues, etc), medical expenses exceeding 7.5% of your AGI, casualty and theft losses, gambling losses up to the amount of gambling winnings, mortgage interest, state and local taxes paid in, property tax paid).

Whichever you choose, itemized and stadard deductions reduce the amount of taxable income, thereby lessening your tax liability.

Answer 3

Keep the receipt as proof of the donation. As long as the total amount of your non-cash donations is less than $250, you can list the amount under "noncash contributions" on Schedule A. If your amount exceeded the $250, you'll need to fill out a special schedule (Form 8283, I think-I'm too tired to look it up right now!). It's not a big deal-it just asks for the name and address of the charity, what you donated, dollar value, and how you determined the value (in your case, it would be the price paid).

Hope that helps!