Download the Charitable gifts: Are church donations tax deductible?
Fill out the form below to schedule a demo or call our sales team at
469-564-3922
Individuals remain a crucial source of philanthropic giving, with 27% of charitable donations going to religious organizations in 2022. Yet many Americans are unclear whether church donations are tax deductible.
In short, yes—donations to religious organizations, including churches, can be tax deductible. However, there are some rules that must be met for charitable gifts to qualify as a tax benefit.
In this article, we highlight what you need to know about which charitable donations to churches and other houses of worship are tax deductible so you can make the best decision for your ministry.
Disclaimer: This article is informational only and is not intended as tax advice. Churches and churchgoers seeking more information should consult a tax professional.
A tax-deductible donation is a voluntary gift of money or goods to an IRS-recognized, tax-exempt organization, which can reduce your taxable income. Donations to individuals are not tax-deductible.
Do you have to pay taxes on donations received? To qualify, a charitable donation must be:
Charitable contributions given to organizations that are registered as a 501(c) (3) charitable organization can qualify for tax deductions. Most organizations will display their status on their website—often in the footer, “About” section, or home page. Still not sure? You can always contact the organization to make sure they qualify as a tax-exempt organization or use the IRS Tax Exempt Organization Tool.
Additionally, to make the tax deduction, you must itemize your personal tax deductions with proper documentation using the IRS Schedule A instead of taking the standard deduction set by the IRS. That’s why keeping track of your tax-deductible donations is essential.
Qualifying documentation to prove you made a contribution includes:
If you make regular contributions through an automatic deduction from your paycheck, you’ll want to keep copies of your W-2 or pay stubs to show the dates and amounts of your donations.
If you made a one-time donation of more than $250, the IRS may require additional documentation, such as a letter of acknowledgment from the nonprofit organization.
Traditionally, tithing meant giving ten percent of one’s earnings to the Church. Tithing is a way for people to support their church, give back to the community, and practice their faith.
Tithing remains a common practice in many churches and religious organizations but doesn’t necessarily equate to each member giving a tenth of their income. Instead, many churches pass a collection basket or have a tithing box where members can provide contributions, or members can make contributions through the church’s website or app.
For purposes of the IRS, tithing can be tax deductible if your religious organization is recognized as a 501(c) (3) charitable organization. Most churches and ministries do qualify, but you’ll want to double-check before filing. Additionally, you’ll need to itemize your deductions and be able to provide receipts or documentation of your tithes as discussed above.
Just because you make a tithe doesn’t mean you have to claim it on your taxes. This is a personal decision that is up to you, and you’re not required by law to claim deductions for your tithes on your taxes. The decision to claim the tax deduction depends on your personal beliefs and your church or church’s policy.
Typically, you can deduct up to 60% of your Adjusted Gross Income (AGI) for charitable cash donations or up to 30% for appreciated property donations. There may be other limits depending on the type of contribution and the organization.
This charitable donation limit applies to all the donations you made throughout the year regardless of how many organizations you gave to. If your donations exceed 60% of your AGI, you will not be able to deduct all of your donations in the current tax year. However, you may be able to carry over the deductions to one of your next five tax returns.
Church donations must meet the IRS rules for charitable donations discussed above to qualify as a tax deduction.
For instance, the church must have an IRS-recognized tax-exempt status for you to claim donations as tax deductions. The qualifications for religious organizations include:
If a church meets these requirements, they are often automatically considered tax-exempt. However, many churches still formally apply to ensure donations qualify as tax-deductible contributions. Churches that are part of larger parent organizations with tax-exempt status are also considered to have a tax-exempt status.
Another consideration is ensuring the church contribution is eligible to be included as a tax deduction.
Typically, the types of donations eligible for a tax deduction include:
Types of donations that are often non-deductible include:
That said, contributions where you benefit, like a ticket to a church dinner dance or auction, may partially qualify if you pay more than the fair market value to the church for the goods or service. For example, if you pay more than the fair market value to attend a church charity event, you can only deduct the amount that is more than the expected cost. So, if you paid $60 for a fundraising movie event where the regular price for the movie is $15, your contribution would be $45.
Giving to your church provides a way to support their mission, your faith, and your community.
Your church donations can also lower your taxable income. Charitable gifts may qualify as tax deductions if your church meets the IRS standards as a tax-exempt organization and you itemize your personal tax deductions. Additionally, the type of donation must meet the IRS eligibility requirements.
If you plan to deduct your church or other charitable donations, you’ll want to keep proper records of all the donations. You’ll also want to keep in mind that there are limits on how much you can deduct, depending on your adjusted gross income and the type of donation made.
Ultimately, the IRS rules governing charitable donations can change from year to year, so you may want to consult a tax professional for specific advice regarding your situation.
