How do charitable donations affect the tax return?

Donations reduce your tax burden! But which details have to be considered?

Updated on by Michael Mühl

Often you donate out of conviction. The donations are usually for a good cause and help other people. But donations also have a positive effect on your tax burden. You can save taxes. Use the online calculator to calculate these savings and read valuable tips on the subject.

The most important questions about "donations and tax savings"

  • 01.
    What exactly is a donation?

    A donation is a voluntary service that someone gives without expecting anything in return. Donations are tax relevant if they are made to charitable organizations or political parties.

  • 02.
    How does a donation affect my tax payments?

    Those who donate to charitable organizations can deduct the donated amount as a special expense from their annual income. This indirectly reduces the amount of tax to be paid. In the case of donations to political parties, half of the amount can even be deducted directly from the tax amount. How exactly the donations affect can be determined with the donation calculator.

  • 03.
    Is there a maximum donation limit?

    Everyone can donate as much money as they want. For tax purposes, however, a maximum of 20 percent of the annual income or, in the case of a company, 4 per thousand of the annual turnover, which in this case also includes the wage payments. If the party donations are counted separately, a maximum of 1,650 euros per person applies.

Donation calculator

  • 04.
    Can I also donate items? What exactly is a donation in kind?

    Donated items can also be claimed for tax purposes. In the case of such a donation in kind, the value of the objects is determined, for example, with the help of sales contracts and recorded on a donation receipt. This value can also be stated in the tax return, as can a donated amount of money.

  • 05.
    Who can receive a donation?

    Everyone who is offered a donation is free to decide whether to accept it or not. But only recognized organizations are allowed to issue a donation receipt for this.

  • 06.
    What is a donation receipt or donation receipt?

    A donation receipt or donation receipt is evidence on which the recipient of the donation confirms receipt of the donation. With this proof, the donor is allowed to declare the amount in the tax return.

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  • 07.
    What does charity mean?

    An association is recognized as non-profit if it makes its financial resources available to the general public. For example, the promotion of sport and culture but also the promotion of minorities and people in need is recognized as a purpose. The association must give an account of every income and every expenditure to the tax office in order not to lose its tax-exempt status.

  • 08.
    How do I report a donation to the tax office?

    Donations are considered special expenses under tax law and are listed directly on the cover sheet of the tax return. The certificates are then submitted together with the completed forms. To ensure that nothing is lost, a copy should first be submitted and the original should be kept in a safe place.

  • 09.
    How do I report donations to political parties?

    The donations to various purposes are broken down under the item special expenses. Party donations are entered in the form fields 127 and 128. The full amount can always be given, even if it is above the maximum amount for the separate calculation of the party donations. In this case, when calculating taxes, the most favorable calculation method for the taxpayer is always used.

  • 10.
    Does a donation always have to be for a good cause?

    Whether the purpose for which the donation was made is a good one is not decisive for the tax office. It is important whether the recipient has adopted the correct legal form. Donations for children in need could not be recognized, for example, if the association that looks after the children opts for simpler but not recognizable bookkeeping. On the other hand, sports clubs that are supported as a leisure activity can be recognized as non-profit.

References

In particular, we used the information from the following sources for the topic "Donations":

Last updated on April 15, 2021

The pages of the theme world "Donations" were last editorially checked on April 15, 2021 by Michael Mühl. They are all up to date.

Previous changes on 11/13/2020

  • November 13th, 2020: Adjustment of the donation calculator to the income tax calculation for 2021
  • Editorial revision of all texts in this subject area