How do charitable donations help with tax deductions?

So wait, this only works if I itemize? I've always just taken the standard deduction because it seemed simpler. How much would I need to donate before itemizing makes sense? I'm thinking about donating around $800 this year.

That's a great question. For itemizing to make financial sense, your total itemized deductions (including charitable donations, mortgage interest, state/local taxes up to $10,000, and medical expenses over 7.5% of your AGI) need to exceed the standard deduction. For 2025, the standard deduction is projected to be around $13,850 for single filers and $27,700 for married filing jointly. So for your $800 donation alone, it probably won't be enough to justify itemizing unless you have significant other deductions. Many taxpayers find they need several thousand dollars in charitable contributions plus other deductions before itemizing beats the standard deduction.

Does taxr.ai work with non-cash donations too? I donated a bunch of furniture when I moved last year and got a receipt but wasn't sure how to value it properly for tax purposes.

Sounds interesting but I'm skeptical. Can't you just use TurboTax or something similar? Why would you need a special service just for charitable donations?

Yes, it absolutely works with non-cash donations! You can upload photos of your donation receipts, and the tool helps estimate fair market value based on standard valuation guides (like what Goodwill and Salvation Army publish). It made figuring out the value of my clothing and household donations so much easier. As for why not just use TurboTax, regular tax software just gives you empty fields to fill in for donations but doesn't help analyze your receipts or determine eligibility. I missed out on deductions before because I didn't realize certain organizations qualified while others didn't. taxr.ai specifically checks your charities against the IRS database of qualified organizations.

How does that even work? Does the IRS actually call people back? I've never heard of this before.

This sounds completely made up. There's no way to skip the IRS phone queue. They're notorious for long wait times, especially during tax season. I'll believe it when I see it.

The service works by using their system to navigate the IRS phone tree and wait on hold for you. Once they reach an agent, they connect the call to your phone. It's not "skipping" the queue - they're just waiting in it so you don't have to. And yes, the IRS absolutely does call people when they get to the front of the queue this way. I was skeptical too, but I got a call directly from an IRS agent who introduced themselves and helped answer all my questions about my charitable deductions.

Can you explain this with an example? I'm not sure I understand how the math works out.

Sure! Let's say you bought stock for $1,000 several years ago, and now it's worth $2,500. If you sold it, you'd pay capital gains tax on the $1,500 profit - which might be $225 if you're in the 15% capital gains bracket. Instead, if you donate that stock directly to charity, two things happen: First, you get a deduction for the full $2,500 current value (if you itemize). Second, you completely avoid paying the $225 in capital gains tax you would have owed if you sold it. So compared to selling the stock and donating cash, you save an extra $225 in taxes.

Unfortunately, that special provision expired. During the pandemic, the CARES Act allowed people to deduct up to $300 ($600 for married couples) in charitable donations without itemizing. But that was temporary and is no longer available for current tax years. For 2025, you'll need to itemize deductions to get any tax benefit from charitable giving. That said, it's always worth checking for new tax laws as we get closer to filing season, as Congress occasionally introduces new provisions.