Tax season is upon us, and as always, many questions arise. Should I tithe on my tax return? Am I allowed to claim my charitable contributions as tax deductible? There are probably a ton of other questions you’re looking for answers to, and we hope we can help!
Let’s first answer this question: “What is a tithe?” Originally, tithing was the act of contributing ten percent, or a tenth of one’s earnings (or crops, or livestock — the tradition goes far back). In many Christian churches today, the act is carried out as some Christians feel they’re called to tithe.
Today, tithing doesn’t necessarily mean that the amount is a tenth of one’s income, but many churches pass collection baskets or tithing boxes and congregants can offer contributions.
So then, are tithes considered charitable donations? Fortunately, the IRS is very transparent when it comes to charitable donation rules and has published extensive guidelines to answer this question!
We hope we can clear up any confusion you might have about your church donations.
Estimated reading time: 10 minutes
Table of contents
Qualifications for a Church to be Tax Deductible
According to the IRS, your church receives an automatic tax exemption status as long as it meets these minimum requirements:
- Must be organized and operate exclusively for religious and educational purposes
- May not significantly influence legislation
- May not intervene in political campaigns
- May not be involved in illegal activities
- May not violate fundamental public policy
What Makes a Tithe a Tax Deduction?
In general, you can deduct expenses for your church offerings from your taxes. But there are a few things you must know:
- Charitable donations cannot exceed 50 percent of your adjusted gross income (AGI)
- Tax deductions must be itemized
- Charitable donations must be made before the end of the tax year
For your taxes, you will not necessarily be taxed on everything you earn or receive. For example, your total annual earnings may be $70,000. However, your adjusted gross income (AGI) may be less after you take deductions from your income tax , such as student loan interest you paid or contributions you made to retirement accounts.
Say your AGI is $50,000. This means your tax deductions cannot exceed 50 percent of taxable income above this amount ($25,000). To receive a tax benefit for your tithes and offerings, your charitable contributions must be itemized at the time you file your tax return.
Therefore, charitable donations are tax deductible and the IRS considers church tithing tax deductible. To deduct the amount you tithe to your church or place of worship report the amount you donate to qualified charitable organizations, such as churches, on Schedule A.
To claim a tithing tax deductible for cash and check donations, verify your tithing donation amount with one of the following below:
- Bank record
- Timely written acknowledgment from the church
However, if any of your cash donations were more than $250, you then must have a receipt of the contribution from the church. A bank record won’t work as your verification.
Church Giving Statistics (2023)
- According to a survey of nearly 3,000 churches, the average per-person giving in 2022 was $2,848. [churchsalary.com]
- Nearly 50% of all church-giving transactions are made with a card. [nonprofitssource.com]
- Churches that have an online tithing option saw an increase of 32% in overall donations.
- 17% of Americans tithe on a regular basis.
- Out of 10 tithers, 7 give based on their gross income instead of their net income.
Donating a Cash Contribution
The IRS has various record-keeping and documentation requirements, depending on the amount of cash you donate to a church. Whenever you make a cash donation to your church, you must retain either a receipt, canceled check or a bank or credit card statement. It’s not necessary for you to send these to the IRS, but if the agency ever contacts you for proof of your donations, you are required to have the documentation to show them.
As mentioned above, if any single donation that you make is greater than $250, you must also obtain a written acknowledgment from the church. This acknowledgment should include the donation amount, a description of any goods or services provided to you in exchange for your donation and a statement that the remaining benefit you receive is an intangible religious one. If you do receive goods or services in the exchange, you must reduce your deduction by their value.
Donating Property
When you donate any property to a church, the tax laws require you to assess the fair market value of each item. You may choose any valuation method, as long as it gives a reasonable estimate of the price a buyer would pay for similar property on the open market. For example, it is reasonable to obtain an independent appraisal on a precious stone you donate to the church. Different appraisal requirements need to be met when the value of you donation exceeds $5,000.
To make things simple, TurboTax has a tool called ItsDeductible that can help you determine the IRS-approved value of your charitable donations. With TurboTax Live Full Service, a local expert matched to your unique situation will do your taxes for you start to finish. Or, get unlimited help and advice from tax experts while you do your taxes with TurboTax Live Assisted.
Document, Document, Document!
In addition, you must document your donations – this is very important. Without written documentation to support a donation, you can’t claim charitable contribution as a tax deduction. There are no exceptions, even if you just put a few dollars in a collection plate each week.
What documentation you need depends on the size and the nature of the donation. For donations of money under $250, all you need is documentation showing the name of the church, and date and amount of the contribution. You can use a bank statement or some other documentation from your own records that substantiates that the payment was made. If you give cash, you won’t have a bank record of the donation. Thus, you’ll need to obtain a written record of the donation from the church. It could be a receipt, letter, or any other document or writing as long as it has all the required information.
For all money donations above $250, you must obtain a written acknowledgement or receipt from the church. The written acknowledgement must contain:
- the church’s name
- the amount of the cash contribution
- the date of the contribution, and
- a statement that no goods or services were provided by the church in return for your contribution, if that was the case.
You don’t need to file this documentation with your tax return. But you must have it available if you’re audited by the IRS and your deductions are ever questioned. Lack of proper documentation is by far the most common reason taxpayers lose valuable deductions.
Keep Track
Keep track of your tax-deductible donations, no matter what the amount. If you made a monetary contribution, qualifying documentation includes a bank statement, a credit card statement and a receipt from the charity (including date, amount and name of the organization) or a canceled check.
Perhaps if you made a contribution as an automatic deduction from your paycheck through your employer, keep copies of your W-2 or pay stubs showing the amount and date of your donation.
You’ll need additional documentation in these circumstances:
- Cash or property donations worth more than $250: The IRS requires you to get a written letter of acknowledgment from the charity. It must include the amount of cash you donated. Whether you received anything from the charity in exchange for your donation, and an estimate of the value of those goods and services. You must receive the letter of acknowledgment by the date you file your taxes (see the tax deadline here) for the year you made the contribution.
- If you deduct at least $500 worth of noncash donations: Fill out Form 8283 if you deduct at least $500 in donated items. Additionally, you must attach an appraisal of your items to the form if they’re worth more than $5,000 total.
Don’t Miss the Deadline
For your donation to be considered tax-deductible when you file, it must have been made by the end of that corresponding tax year. For example, you have until Dec. 31, 2023, to make donations you want to claim on your 2023 tax return, which gets filed by April 2024. Donations you make in 2024 can be claimed on the return you file in 2025.
Per the IRS, the delivery date for a donation is determined as follows:
- Check: The day the check was mailed, not received.
- Credit card: The day the charge was made/processed, not when the bill was paid.
- Stock: The day the broker transfers the gift to the charity.
- Option: The day the option is exercised by the charity
Frequently Asked Questions
If your church isn’t considered a tax-exempt charitable organization, it may not be possible to claim a tithe on your taxes. Some congregants feel that tithes are a personal matter between them and their churches or between them and God and they may not wish to involve the government in this process. Ultimately the question of whether or not to claim your tithes on your taxes is a personal one that only you are equipped to answer.
For many who feel the call to tithe, the question can arise: should you tithe on your tax refund? In short, this depends on your personal beliefs and potentially your church’s policy. If you’ve tithed throughout the year, your tax return is based on income you’ve already tithed on.
Ultimately, whether to tithe before or after taxes is up to you and your family. However, to better understand the right path for you, let’s break down what it means to tithe before or after taxes.
If you tithe before taxes, you’re tithing from your gross income or pretax money. If you’re tithing after taxes, you’re tithing from your net or post-tax income. So, tithing before taxes typically means making a slightly larger contribution than tithing after taxes.
As 501(c)(3) organizations, churches have specific tax rules on what they do and don’t have to pay taxes on. Churches are completely tax-exempt as organizations if they follow the IRS’s rules, so churches should rarely have to report tithes for tax purposes. Generally, these rules are: don’t be political and don’t use your income to lobby. While churches don’t have to report donations, donors can report their contributions to get tax breaks.
Summary
Did we answer the question are church donations tax deductible? We hope so! It’s important to be a good steward of your finances. If you’re still unsure, consider talking with head of financial of your church to get a better understanding. And if you don’t feel confident in your taxes this season, consider working with an accountant who’s job it is to make our lives easier.
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