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Ask the taxgirl: Where to Report Charitable Contributions

January 9, 2009 · 9 comments

Taxpayer asks:

Hello there and thank you for answering my question.

I am self employed and contributed nearly $8,000 in cash/non cash donations this past year (goodwill, church, habitat for humanity). When my friend did my taxes on her computer program it did not reflect a deduction upon entering in the charitable donation information.
I hve all proper documentation but I am wondering if there is some place in particular she has to put the amount on the form when not filing a long form?

Taxgirl says:

The short answer is that you have to use the long form.

The short form (1040-EZ) is a basic tax form for taxpayers who report wages, use the standard deduction and plan to claim no credits other than the earned income tax credit (EITC). You cannot claim itemized deductions on a short form.

Charitable contributions are itemized deductions. You report itemized deductions on a schedule A on your federal form 1040 on lines 16-19 (see below):

charitable_sm.jpg

If your itemized deductions exceed your standard deduction ($5,450 if single and $10,900 if married filing jointly), you’ll want to claim the itemized deduction to get the bigger benefit.  You should consider other deductions that might be included on Schedule A such as medical expenses, other taxes paid, casualty losses, job expenses and miscellaneous expenses to maximize your available deductions.

More importantly, however, than the charitable deductions issue is that if you’re self-employed, you can’t use the short form. You must use a long form (federal form 1040) if you had net earnings from self-employment of at least $400. You’ll need to file a Schedule SE to figure your self-employment tax – and you will likely want to file a Schedule C to claim business expenses against your business income.

Make sure you’re using a good computer program, like TurboTax or TaxAct, to walk you through these forms. If it’s still too confusing, consider hiring a tax professional.

Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.

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{ 9 comments… read them below or add one }

1 Paula January 9, 2009 at 8:27 am

Isn’t the standard deduction for tax year 2008 $5440 for single and $10900 for MFJ?
I believe you added in the personal exemption amount of $3500.

2 Paula January 9, 2009 at 9:27 am

Should be $5450 for single sorry.

3 Kelly January 9, 2009 at 9:30 am

Doh! You’re right on both counts. I’ve edited the piece to reflect the corrections. Thanks!

4 Dennis Erickson January 9, 2009 at 12:19 pm

Could he deduct these contributions on Schedule C, his business?

5 anthony January 10, 2009 at 11:01 pm

Please change the wording of the disclaimer. It’s getting disgusting and boring.
Thanks tax girl

6 Kelly January 10, 2009 at 11:10 pm

Sorry Anthony, that’s probably not going to happen. It’s to protect myself and my readers. Folks who aren’t regular readers and are just popping in to find one answer to one particular question are just seeing it for the first time – and everyone else can use the reminder. As far as disclaimers go, it’s pretty tame and I stand by it.

7 Vinny January 13, 2009 at 12:31 pm

@Dennis:

I have seen taxpayers who run their charitable contributions through their Schedule C as “promotions” or “advertising” rather than as individual itemized deductions. They were taking the aggressive (my opinion) position that those payments were “ordinary and necessary” for their business under Section 162 of the Internal Revenue Code.

I say aggressive because Section 162(b) pretty much nixes this idea if you’re trying to get around the limitations on charitable contributions (including the fact that you have to itemize to deduct charitable contributions).

You can’t have it both ways. If you transfer property to a charity out of disinterested generosity, it belongs on Schedule A. You’d have a hard time arguing that this is “ordinary and necessary”.

8 Shonda June 27, 2009 at 2:53 pm

Morning and thank you for any assistance you can provide. My aunt is 73 years young. She still works and files taxes (single). She donates a lot of items to Goodwill and the Salvation Army, but she deoes not make enough to use any form besides the EZ. What can she do to make these donations work for her?

9 Kelly June 29, 2009 at 7:19 am

Whether your aunt can take the charitable deduction is less a function of how much she makes and more a function of what kind of form she files. Charitable deductions are claimed, together with other deductions such as real estate taxes, medical expenses and mortgage interest deductions on a Schedule A, for those taxpayers who itemize. If your aunt does not itemize her deductions (meaning she is better off taking the standard deduction), then she cannot take advantage of the charitable deduction. She is, however, still doing a good thing!

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