739 / What is the maximum annual limit on the income tax deduction allowable for charitable contributions?

Editor’s Note: The OBBB created a new charitable deduction for taxpayers who do not itemize deductions.  Taxpayers who do not itemize deductions can claim an above-the-line deduction charitable contributions of up to $1,000 ($2,000 for joint returns).  Taxpayers who do itemize will only be entitled to deduct contributions to the extent they exceed 0.5% of the taxpayer’s AGI (that disallowed portion may be carried forward if the taxpayer has other charitable contribution carryforwards for the tax year).  For corporations, the deduction is allowed only to the extent that it exceeds 1.0% of the corporation’s taxable income.

An individual who itemizes may take a deduction for certain contributions “to” or “for the use of” charitable organizations. The amount that may be deducted by an individual in any one year is subject to the income percentage limitations as explained in Q 740.The value that may be taken into account for various gifts of property depends on the type of property and the type of charity to which it is contributed. These rules are explained in Q 741 to Q 743.