Maxine Aaronson, Attorney at Law
Attorneys discussing a case. Glasses resting on documents depicting charts/diagrams. The word 'strategy' is highlighted. Puzzles coming together.

Tax Newsletter

  • Deduction of Expenses for Charitable Work
    You may be able to deduct certain expenses that are related to volunteer services offered to a qualified charitable organization. However, these services should not have been reimbursed or used for personal... Read more.
  • Funding Retirement: Self-Employment Tax
    The Internal Revenue Service requires certain individuals who have a trade or business to pay self-employment tax. What is the reason for this? Social Security Withholdings If you work for someone else,... Read more.
  • Tax Treatment of Personal Injury Awards
    The U.S. Internal Revenue Service (IRS) takes a broad view of what is considered “income” for purposes of taxation. The U.S. Supreme Court has provided additional interpretation, stating that “any funds”... Read more.
  • The Reciprocal Trust Doctrine Can Trap the Unwary
    Estate planning attorneys utilize a number of different estate planning techniques to accomplish the goals of their clients and sometimes to minimize transfer taxes. One common estate planning technique is the transfer of assets into an... Read more.
Tax News Links

Limits on Tax Deductibility for Charitable Contributions

If you made a tax-deductible contribution to a qualified charitable organization, the actual amount you can deduct may be limited to a percentage of your adjusted gross income. The amount that you are entitled to deduct depends on several factors:

  • Who you made a contribution to
  • What you contributed
  • Your income

The 50% Limit

In general, your charitable deduction cannot be more than half of your adjusted gross income. Contributions made to qualified organizations are subject to the 50% limit. These types of organizations include:

  • Indian tribal governments
  • The United States, District of Columbia, or any state or political subdivision of the U.S.
  • Churches
  • Educational organizations with a full student body and faculty on site
  • Hospitals and research centers

Different rules may apply to contributions of capital gains property (property that would bring long-term income).

The 30% Limit

Your charitable deduction cannot be more than 30% of your adjusted gross income. Contributions subject to the 30% limit include:

  • Contributions of capital gains property to any 50% limit organizations (generally)
  • Money spent on behalf of a student living with you who was selected by a qualified organization
  • Gifts to other qualified organizations besides those subject to the 50% limit
  • Gifts other than those that are capital gain property for the use of any organization
  • The 20% Limit

    For some contributions, your deductions cannot be more than 20% of your adjusted gross income. Contributions subject to the 20% limit are all those that are capital gains property gifts to or for the use of a charitable organization, aside from those that fall under the 50% limit.

    Note: If you contribute 20% or less of your adjusted gross income, there are no limits to the deduction for your total contributions.