How to Use the Charitable Contribution Carryover Worksheet

Charitable contributions can provide tax benefits, but there are limits to how much you can deduct in a given year. If your donations exceed the allowable deduction, you may be able to carry over the excess amount to future tax years. This ensures you don’t lose out on deductions simply because they surpass annual limits.

To track and apply these carryovers correctly, the IRS provides a Charitable Contribution Carryover Worksheet. Using this worksheet properly helps maximize deductions while ensuring compliance with tax laws.

Locating the Worksheet

The Charitable Contribution Carryover Worksheet is included in the instructions for Schedule A (Form 1040), which taxpayers use to itemize deductions. The IRS updates these instructions annually, so it’s important to use the most recent version. The worksheet is typically found at the end of the document, following explanations of deduction limits and itemized deduction calculations.

Taxpayers can access the worksheet on the IRS website by searching for “Schedule A instructions” for the relevant tax year. The document is available as a downloadable PDF or can be used digitally. Many tax software programs incorporate the worksheet automatically, integrating it into deduction calculations rather than as a standalone form.

Qualifying Charitable Donations

To be deductible, a contribution must be made to an IRS-recognized qualified organization, such as religious institutions, educational organizations, public charities, and certain private foundations. Donations to individuals, political campaigns, or foreign organizations generally do not qualify. The IRS provides an online tool, the Tax Exempt Organization Search (TEOS), to verify an organization’s eligibility.

The form of the donation also affects deductibility. Cash contributions—via check, credit card, or electronic transfer—are generally deductible up to 60% of adjusted gross income (AGI) when given to public charities. Non-cash donations, such as clothing, household items, or appreciated securities, require additional documentation. Items must be in good condition, and contributions exceeding $500 require Form 8283. Donating publicly traded stock allows for a deduction based on fair market value, avoiding capital gains tax on appreciated assets.

Contributions must be made by December 31 of the tax year to be deductible. A check mailed on December 31 but cashed in January still qualifies for the earlier tax year. Credit card donations are deductible in the year the charge is made, even if the bill is paid later. Pledges, however, are not deductible until actual payment is made.

Deduction Threshold Calculations

The IRS limits how much of a taxpayer’s charitable contributions can be deducted in a single year based on AGI and the type of organization receiving the donation.

Cash contributions to public charities, including churches and educational institutions, are capped at 60% of AGI. Donations of long-term appreciated assets, such as stocks or real estate, are limited to 30% of AGI for public charities and 20% for certain private foundations. If a donation exceeds these limits, the excess amount must be carried over to a future tax year, subject to the same AGI limitations.

If a contribution includes a benefit—such as a gala dinner, merchandise, or event tickets—only the portion exceeding the fair market value of the benefit is deductible. For example, if a taxpayer donates $500 to a charity and receives a concert ticket worth $100, only $400 can be deducted. Charities must provide written acknowledgment for donations over $250, specifying whether goods or services were received in exchange.

Completing Carryover Amounts

Once the allowable deduction for the current year is determined, any excess contributions must be recorded accurately for future application. The Charitable Contribution Carryover Worksheet provides a structured format for tracking these amounts, preventing miscalculations that could lead to disallowed deductions.

The worksheet requires taxpayers to list unused contributions from previous years separately from new excess amounts. Older unused deductions must be used before newer ones, as carryovers expire after five years. Maintaining accurate records of prior years’ contributions ensures compliance and maximization of available deductions.

Applying Unused Portions to Future Returns

When charitable contributions exceed deduction limits for a given tax year, the unused portion can be carried forward for up to five subsequent years. The oldest excess contributions must be deducted first. If a taxpayer has multiple years of carryover, careful tracking is necessary to prevent deductions from expiring. Each year, the deductible amount is recalculated based on AGI limits, meaning changes in income or tax law could impact how much can be used.

If a taxpayer continues making charitable contributions while carrying over excess amounts, current-year donations must be deducted first before applying any carryover. This prevents new contributions from being unnecessarily pushed into future years, which could cause older carryover amounts to expire. Taxpayers using professional tax software or working with an accountant should verify that deductions are applied correctly. If a taxpayer’s income decreases significantly, making it difficult to use the full carryover within five years, strategic tax planning—such as bunching deductions in high-income years—may help maximize the benefit.

Recordkeeping Requirements

Maintaining thorough documentation is necessary for substantiating charitable deductions and ensuring compliance with IRS regulations. Proper records should include receipts, acknowledgment letters, and any required tax forms detailing the nature and value of contributions. For cash donations, bank statements, canceled checks, or credit card statements serve as proof. Non-cash contributions require more detailed records, including descriptions of donated property and, in some cases, appraisals.

For carryover amounts, taxpayers should retain copies of prior years’ tax returns, including Schedule A and the Charitable Contribution Carryover Worksheet, to track the remaining balance and expiration timeline. The IRS may request documentation during an audit, and failure to provide adequate records could result in disallowed deductions. Contributions exceeding $5,000 typically require a qualified appraisal, and donations of vehicles have additional reporting requirements, including Form 1098-C.