Tax Deductions on Donations

Yigal Lelah has worked on various housing projects for decades, overseeing building and construction in Texas and Beverly Hills. He focuses on workforce housing, enabling police officers and teachers to purchase homes. Yigal Lelah is the executive director of Neighbourhood Builders Community Development Corporation (NBCDC), a tax-deductible entity.

The NBCDC is a nonprofit that develops and rents houses to low-income families in Dallas. The NBCDC aims to provide quality housing to create neighborhoods for households in need and provide quality accommodation at affordable prices. Donations to the organization are tax-deductible.

A tax deduction reduces an entity's liability via lowering its taxable income. Donations given to tax-exempt organizations, such as nonprofits and charities, are usually tax-deductible. This fundamentally means they pay less tax because the amount of their taxable revenue decreases. Before nonprofit organizations can get a tax deduction or claim tax-deductible donations, they have to itemize their tax returns by filing 1040-SR or Schedule A of IRS Form 1040. Generally, nonprofits can deduct as much as 60 percent of their adjusted gross income through charitable donations. It could be as high as 100 percent for cash gifts.