If I want to pay for a service to a 501(c)(3) organization, do I get a personal tax benefit or write-off for paying the cost of that service?
Taxpayers are permitted to claim charitable contribution deductions for amounts paid “to or for the use of” a charity, and, if you itemize deductions, you would be able to claim a deduction on your federal income tax return even if you pay the provider directly on behalf of the charity.
A gift made “for the use of” a charity is subject to an annual limit of 30% of a taxpayer’s contribution base (essentially adjusted gross income), rather than 50% for other contributions of cash, but most taxpayers don’t give so much of their income that they face such limitations.
You will want to obtain an acknowledgment from the charity that the payment (to an entity that is not a charity) was actually made on behalf of the charity so that an IRS examiner would not be inclined to deny the claimed deduction.
Tuesday, December 18, 2007