Americans have used charitable donations to lower their taxable income since World War I when the federal government introduced the charitable tax deduction.
Not all nonprofit organizations qualify as beneficiaries for tax-lowering gifts, nor do all gifts to eligible charities qualify. Knowing what you can and can’t claim helps you maximize the potential tax savings that the charitable tax deduction offers.
Charitable Donations of services:
If you donate your services to a 501(c)(3) organization, you have no deduction whatsoever. Doesn’t seem fair, does it? Unfortunately the IRS places no value on your time or expertise. While you are not allowed to deduct the value of your time at the rate you would normally charge, you can still deduct mileage to and from the charitable organization and the cost of all supplies and materials used in the performance of the service.
By the same token, if you donate your services to an individual who needs help, you are not be able to write off the donation. This is because the IRS does not allow the deduction of gifts to individuals.