Cash donations you make to your church are eligible deductions you may be entitled to claim on your income tax return. The Internal Revenue Service permits you to claim these deductions as long as you maintain written records of your donations. The church should provide you with a written statement, which lists the total amount of your donations for the year. This statement serves as adequate records for your deduction.
The amount or nature of the tithe is not normally a consideration in determining whether you can deduct the amount. However, you may only deduct tithes from which you receive no personal or entertainment benefit. If you do receive a benefit from your donation, you’ll need to subtract the value of the benefit you receive from the donation you claim. For example, if your donation includes a free dinner, you’ll need to subtract the value of the meal as a personal benefit. The remainder of your donation is tax deductible.
Itemized Deduction vs. Standard Deduction
You can claim tithes as charitable contributions on Schedule A as an itemized deduction, which is an attachment to your 1040 income tax return. The IRS allows you to claim either itemized deductions or a standard deduction to reduce your taxable income. Standard deductions are available to all taxpayers and the filing status of the taxpayer determines the deduction amount. Itemized deductions are the sum of specific expenses paid by the taxpayer during the year. The IRS does not allow you to claim both standard and itemized deductions, so you’ll need to determine which category gives largest tax deduction. Aside from charitable contributions, other common itemized deductions include mortgage interest, mortgage insurance premiums, property taxes and state income taxes paid. Standard deduction amounts change each year, so review current instructions for Form 1040 to determine your standard.
If you file itemized deductions, the total amount of charitable contributions you can claim is subject to Adjusted Gross Income, or AGI, limitations. The AGI limitation for churches is 50 percent. This means that you can deduct no more than 50 percent of your adjusted gross income for church tithes. The IRS calculates your adjusted gross income by adding your income from all sources and subtracting certain deductions, such as student loan interest, IRA contributions, self-employment taxes and moving expenses.
If you exceed the 50 percent AGI limitation during a year, you don't forfeit your deductible contributions. While you are limited to the amount you can deduct in a particular year, any deductible tithes you make over the limitation amount carry over to subsequent tax years. You may carryover contributions from previous years, up to the amount of any applicable AGI limitation, for five years or until the excess is fully deducted, whichever occurs sooner.
- IRS: Publication 17 -- Your Federal Income Tax: Organizations That Qualify to Receive Deductible Contributions
- IRS: Publication 17 -- Your Federal Income Tax: Examples of Charitable Contributions - A Quick Check
- IRS: Instructions for Schedule A: Charitable Contributions - Gifts by Cash or Check
- IRS: Publication 526 -- Charitable Contributions: Limits on Deductions