Providing food to the needy is an ancient charitable tradition that food banks keep alive in modern times. While you probably donate food to your local food bank out of a sense of community spirit, your box of nonperishable foodstuffs can potentially generate more than a warm, fuzzy feeling: In many cases, your donation can be claimed as a deduction on your federal income tax return.
Qualifying Food Bank
First, you’ll have to make sure that the food bank to which you give the food qualifies to receive tax-deductible contributions. Many charities can accept tax-deductible donations, but the Internal Revenue Service requires that they be a recognized 501(c)(3) organization. Most nonprofit food banks have this designation, but if you’re unsure, check the IRS’ database of eligible organizations (see Resources). Food banks operated by religious organizations, service organizations such as the Red Cross or United Way, governmental agencies or veterans groups usually qualify as eligible organizations.
Determining Deduction Value
IRS auditors aren’t going to let you give a couple boxes of mac and cheese to a food bank and claim a $300 deduction. The IRS requires that you claim only fair market value of any donation you provide to charity. While there isn’t a proscribed method to determine a donation’s value, figuring the donated food’s fair market value should be pretty easy: Just claim what you’d expect to reasonably pay for the items if you purchased them yourself at the supermarket.
Substantiating the Donation
If you plan on taking a deduction based on the food you donate to the food bank, you’ll need to be able to substantiate the donation should you be audited. If the food’s fair market value is worth less than $250, you need to get and keep a receipt with the name of the organization, the date of the contribution and a brief description of the food you donated. If you make a donation valued between $250 and $500, you’ll need to get and keep a written acknowledgement of the donation from the food bank that includes a description of the donation and a statement that you didn’t receive anything in return for the donation. Larger donations will require you to state when and where you obtained the goods and how you determined the donation’s value.
Claiming the Deduction
If you want to make use of the donation, you’ll need to itemize your deductions, and waive the standard deduction, which is $5,950 for individuals and $11,900 for married couples in 2012. This means the total of all your itemized donations must exceed the amount of the standard deduction you are eligible to take based on your filing status to make it worth itemizing. If they don't, you won't be able to receive a direct tax benefit for your contribution to the food bank. Charitable contributions are reported on Schedule A of your Form 1040. The value of your food donations through the year is reported on line 17.
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