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How do I set the donations
AI accountant’s answer:
To deduct donations on your tax return, you'll need to itemize your deductions instead of taking the standard deduction. To itemize, you'll need to file a Schedule A along with your Form 1040. Here's a step-by-step guide to reporting charitable donations on your taxes: 1. Make sure you're eligible: To claim deductions for charitable contributions, you must itemize your deductions. If the standard deduction results in a lower tax liability, you might want to opt for that instead. 2. Gather documentation: Keep records of your donations, such as receipts, acknowledgment letters from the organizations, cancelled checks, or bank statements that show the date and amount of the contributions. 3. Determine the value of non-cash donations: If you donated non-cash items like clothing or household goods, you'll need to determine the fair market value of these items. You can typically find the value by looking at similar items in thrift stores or using valuation tools provided by some charities. 4. Fill out Schedule A: List your donations in the "Gifts to Charity" section of Schedule A. You'll need to report cash donations and non-cash donations on separate lines. 5. Report carryover contributions: If you've made donations in previous years that exceeded the annual limit for charitable deductions, you can carry over the excess amount to the current tax year. Be sure to keep records of any carryover contributions and report them on Schedule A. 6. Attach Schedule A to your Form 1040: After you've completed Schedule A, attach it to your Form 1040 or Form 1040-SR when you file your taxes. Keep in mind that there are limits on the amount of charitable contributions you can deduct in a single tax year. Generally, you can deduct contributions up to 60% of your adjusted gross income (AGI), but some types of donations have lower limits. Make sure to check the specific limits that apply to your situation. Note: For tax year 2021, taxpayers who took the standard deduction were allowed to take an above-the-line deduction for cash contributions to qualifying charities up to $300 for single filers and $600 for joint filers. However, this provision was not extended for the 2022 tax year.
Comment from reviewer
David Bailey, EA, MBA
Not Correct.
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