The Salvation Army long has been a treasured part of the holiday season. In 1979, the organization’s Angel Tree program joined its Red Kettle cash collection efforts to help those in need. With Angel Trees, children request items such as clothing and toys and their requests are noted on a paper angel, attached to a tree. Community members purchase the items listed on their chosen angels and turn them into the Salvation Army, which then distributes the gifts to the appropriate person. Virtual Angel Trees even allow donors to choose an angel online and have items shipped to a designated center. As with most charitable contributions, you can deduct your Angel Tree gift from your taxes, but you’ll need to follow proper protocol to protect yourself in case of an audit.
Gifts and monetary donations given to the Salvation Army's Angel Tree program are tax deductible.
The Benefits of Charitable Contributions
Since the Angel Tree program comes at the end of the year, your mind likely is already on the tax season that’s just around the corner. The good news is that if you itemize your deductions, you can offset at least a small part of the taxes you pay on your income. Your Angel Tree purchase might total only $50 or $100 or so, but if you contribute to multiple charities throughout the year, it can add up to big savings at tax time.
To get your tax deduction for the current tax year, you’ll need to have made all your purchases by Dec. 31 at midnight. This shouldn’t be a problem in the case of the Angel Tree. The deadline to drop off purchases always falls early enough in the month for the Salvation Army to get the gifts to the children in time for Christmas.
Deducting Your Angel Gift
The most important thing you need to do when picking out your gifts for your angel is to save every receipt. If possible, make a copy of the angel and attach your receipts to it for your file. If you receive a confirmation email when you choose a virtual angel, you can attach your receipts to this paperwork. You should be covered with just the receipts, but if you’re audited, you’ll be grateful to have as much paperwork as possible.
At tax time, you’ll list your Salvation Army gifts along with any other charitable contributions you made during the tax year on Schedule A, Form 1040. You can only do this if you itemize deductions, so you may find that even if you save your receipts, you might never use them.
Understanding Donation Limits
Each year, you can claim up to 60 percent of your adjusted gross income on charitable contributions. But you can only claim donations to recognized organizations, so that GoFundMe campaign to help your buddy buy a new car won’t count. Although it likely won’t be an issue with your Angel Tree donation, if you contribute $250 or more, you must have a written statement from the nonprofit acknowledging the donation and amount.
When filing your taxes, you should crunch the numbers both ways. Unless you have a large number of itemized deductions, chances are the standard deduction – $12,000 for single taxpayers and $24,000 for married couples filing jointly as of the 2018 tax year – will win. This doesn’t mean you shouldn’t save your receipts in case you do have enough, but you’ll likely learn after a couple of tax seasons whether it’s worth keeping track.
- Salvation Army ALM: Angel Tree Program
- Salvation Army: Frequently Asked Questions - Virtual Angel Tree
- IRS: SCHEDULE A (Form 1040)
- IRS: Publication 526 (2017), Charitable Contributions
- Forbes: What The New Tax Law Means For Your Charitable Giving
- Corporate Finance Institute. "Angel Investor." Accessed July 26, 2020.
- U.S. Securities & Exchange Commission. "Updated Investor Bulletin: Accredited Investors." Accessed July 26, 2020.
- Angel Resource Institute. "2016 Angel Returns Study." Accessed July 26, 2020.
Stephanie Faris has written about finance for entrepreneurs and marketing firms since 2013. She spent nearly a year as a ghostwriter for a credit card processing service and has ghostwritten about finance for numerous marketing firms and entrepreneurs. Her work has appeared on The Motley Fool, MoneyGeek, Ecommerce Insiders, GoBankingRates, and ThriveBy30.