Wondering, if can you write off GoFundMe donations on your taxes. Many people contribute to GoFundMe campaigns, but understanding the tax implications can be tricky. In this article, we’ll explore which donations are tax-deductible, how to claim them, and what documents you’ll need. From differentiating personal gifts from charitable contributions to avoiding common mistakes, this step-by-step guide will help you navigate the tax process effectively. Whether you’ve donated to support a cause or a nonprofit, this guide provides the clarity you need to make informed tax decisions when filing your return.
1. What Types of GoFundMe Donations Are Tax-Deductible?
GoFundMe donations can generally be categorized into two main types: personal donations and charitable donations.
- Personal Donations: If you donate to a personal fundraiser (e.g., to help someone with medical bills or financial hardship), these contributions are considered personal gifts and are not tax-deductible. The IRS treats these donations as gifts to individuals rather than contributions to a charity.
- Charitable Donations: Donations to registered 501(c)(3) nonprofits through GoFundMe are tax-deductible. These donations are treated similarly to any other contribution you make to a qualified charitable organization, allowing you to claim them on your tax return. For example, if the GoFundMe campaign is organized on behalf of a recognized charity, you can claim a tax deduction.
2. Can You Write Off Personal GoFundMe Donations?
Personal GoFundMe donations are often misunderstood when it comes to tax deductions. Since donations to personal fundraisers are considered gifts, they are not tax-deductible.
3. Why Aren’t Personal Donations Deductible?
The IRS views these contributions as personal gifts, which don’t qualify for tax deductions. These donations typically go to support an individual or family, such as funding medical expenses or recovery from a natural disaster. Since the donation is given directly to an individual without involving a registered charity, it doesn’t meet the IRS’s standards for a charitable deduction.
Key Takeaway:
If you donate to an individual or personal cause through GoFundMe, do not expect to receive a tax deduction.
4. Claiming Charitable GoFundMe Donations on Your Tax Return
If you’ve donated to a GoFundMe campaign linked to a registered charity, these contributions may be eligible for a tax deduction. Here’s how to ensure your donations qualify and how to claim them on your tax return:
How to Identify a Charitable Campaign
Before claiming any deductions, it’s crucial to confirm that the GoFundMe campaign is for a registered charity. Look for the name of the nonprofit listed on the campaign page or a note that the funds are being distributed through PayPal Giving Fund, a non-profit partner of GoFundMe.
Steps for Claiming a Charitable Donation:
- Check the 501(c)(3) Status: Ensure the organization has IRS-recognized 501(c)(3) status by verifying through the IRS’s exempt organization database.
- Obtain Documentation: Keep records such as receipts, acknowledgment letters from the charity, and any other relevant documentation. The IRS requires that any donation over $250 be accompanied by a written acknowledgment from the charity.
- File Form 8283: If your donations exceed $500, you will need to file Form 8283 with your tax return to report non-cash charitable contributions.
Key Takeaway:
To claim charitable GoFundMe donations on your tax return, ensure the funds were given to a registered nonprofit, and keep detailed records.
5. Documentation You’ll Need for Tax Deductions
Proper documentation is key to claiming any charitable donation, including those made through GoFundMe. Without the right records, you could face difficulties proving your donations to the IRS.
What Documents to Keep
- Donation Receipts: Always request a receipt or acknowledgment from the charity when donating through GoFundMe. This receipt should include the amount of the donation, the date, and confirmation of the organization’s 501(c)(3) status.
- Bank Statements: Keep your bank records or credit card statements that show the donation amount and the date it was made.
How to Get a Tax Receipt from GoFundMe
GoFundMe automatically generates tax receipts for donations made to registered charities through the platform, often via PayPal Giving Fund. For personal donations, no receipt will be issued since they are not tax-deductible.
Key Takeaway:
For charitable donations, make sure to secure a proper tax receipt and maintain all records for at least three years.
6. Filing Your Taxes: How to Include GoFundMe Donations
Now that you’ve gathered all your necessary documentation, here’s how to file your taxes with charitable donations from GoFundMe:
Step-by-Step Process:
- Itemize Deductions: You’ll need to itemize deductions on Schedule A (Form 1040) to claim charitable donations. Ensure that your total deductions exceed the standard deduction for your filing status.
- Report Your Donations: Report your charitable contributions under the “Gifts to Charity” section on Schedule A. Include the name of the charity, the donation amount, and the date.
- Attach Form 8283: If your total non-cash contributions exceed $500, you’ll need to complete Form 8283, detailing each donation over this amount.
Key Takeaway:
Be sure to itemize your deductions and follow the necessary steps to report your charitable GoFundMe donations.
7. Common Mistakes to Avoid When Claiming GoFundMe Donations
When claiming GoFundMe donations on your tax return, there are several pitfalls to watch out for:
1. Misclassifying Personal Donations as Charitable Deductions:
- Personal donations made to individuals are not tax-deductible. Attempting to claim these donations could result in penalties or audits by the IRS.
2. Failing to Maintain Documentation:
- Always keep receipts and acknowledgment letters for your donations. Failing to maintain documentation could lead to disallowed deductions during an audit.
3. Donating to Non-Registered Charities:
- Verify that the charity is IRS-approved before donating, or you won’t be able to claim a deduction.
Key Takeaway:
To avoid issues, ensure you correctly classify your donations and maintain thorough documentation.
8. Special Cases: Medical, Business, and Other Donations
Medical GoFundMe Donations
Donations made to individuals for medical expenses are considered personal gifts and are not tax-deductible. However, if you contribute to a registered charity raising funds for medical purposes, the donation may qualify.
Business Donations
If your business donates to a GoFundMe campaign for a registered charity, it may qualify as a business expense. However, personal campaigns would not qualify for such deductions.
Key Takeaway:
Check the tax rules based on the type of cause or business scenario before claiming deductions.
Final Thoughts
GoFundMe is a powerful platform for helping others, but don’t expect all your donations to be tax-deductible. While donations to individuals or personal causes are not deductible, contributions to registered charities are. Keep detailed records, consult a tax professional if needed, and ensure that you’re donating with the right expectations.
Conclusion
By following this step-by-step guide, you can confidently claim charitable GoFundMe donations on your tax return. Be sure to itemize your deductions, verify the charity’s status, and keep proper documentation to maximize your tax benefits.
FAQs
Can I write off GoFundMe donations made to individuals?
No, donations to individuals are considered personal gifts and are not tax-deductible.
How do I get a tax receipt for a GoFundMe donation?
GoFundMe will issue a tax receipt for donations made to registered 501(c)(3) charities, typically through PayPal Giving Fund.
