This post may contain affiliate links which may compensate us based on your interaction. Please read the disclosures for more information.
The quick answer? It depends.
Image source: Getty Images
If you’re in the process of filing your taxes, you may be eager to take advantage of as many deductions as you can. The more deductions you’re able to claim, the more you can reduce your tax liability.
Now, if you’re itemizing on your tax return, there are a host of deductions you may be eligible for. You can deduct the interest you paid on your mortgage last year, property taxes, and medical expenses exceeding 7.5% of your adjusted gross income. You can also deduct charitable contributions you made in 2022.
Discover: Find the best tax software for your situation here
Save: We researched free tax software and put together a list of the best here
But do GoFundMe donations count? The quick answer is that in many cases, they won’t. But there are some exceptions.
Don’t claim the wrong tax deductions
Claiming tax deductions you aren’t actually eligible for could lead to an IRS audit. And that’s probably a scenario you’d rather avoid. That’s why it’s important to know the rules of deducting charitable donations.
In a nutshell, you can deduct donations to a 501(c)3 or registered charity. Some GoFundMe donations might fall under that umbrella, so you’ll need to check the details of the donations you made to be sure.
But in many cases, GoFundMe donations are to personal fundraisers, not fundraisers for registered charities. And so if you donated to those, well, it was a nice thing to do, but it won’t necessarily result in a tax break.
As an example, let’s say a child in your neighborhood needed surgery and neighbors rallied to help the family cover the cost of that care. If you donated $25 to that campaign, you no doubt helped the family in question. But that $25 is not a donation you can write off. However, GoFundMe partners with different organizations, like the American Red Cross and American Cancer Society, so if you contributed to a fundraiser for a registered charity like these, you may be eligible to deduct your contribution on your tax return.
When in doubt, ask a tax professional
The tax code is very complex, and the rules surrounding deductions can be complicated. So if you’re not sure whether a given tax deduction is one you’re eligible for, your best bet is really to ask someone who knows, like an accountant or tax preparer.
In fact, if you’re itemizing deductions on your tax return, it’s often a good idea to enlist the help of an accountant or tax preparer to make sure you aren’t making mistakes. Those mistakes could include claiming deductions you aren’t entitled to, or failing to claim deductions you’re actually eligible for.
Many people overlook the fact that using a tax preparer might mean getting to reap more tax breaks in total. So while you may not be so eager to pay the fee associated with hiring a tax preparer, your savings might more than make up for it.
Just as importantly, using a tax preparer might spare you the hassle of having to deal with an audit if you innocently claim a deduction you thought you could take. And that benefit alone is probably worth the money.
Alert: highest cash back card we’ve seen now has 0% intro APR until 2024
If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee.
In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.
