One way many people overlook when thinking of ways to save on their wedding is tax deductions. Here are the rules, along with corresponding IRS resources, followed by some ideas for getting the deductions. (Disclaimer: I’ve taken the H&R Block tax preparer’s course, but I am not a tax professional. So, please double check your deductions through a tax software or professional.)
If you use Schedule A to itemize deductions on a Federal 1040 tax return you can reduce your taxes. IRS Publication 526, found here, lays out the rules for what can and cannot be counted as a donation.
First, for your contribution to be tax deductible, you cannot receive special extras in return for your donation. For example, donating to a VFW or church–in return for waiving the facilities fee for your reception–is not tax deductible. If you give more than the usual cost of the facilities, though, the excess is deductible. Also, your donation has to be for general use, not designated for a particular person.
What types of organizations can receive donations? In general, operations in the United States “organized and operated only for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals” can qualify to receive tax-deductible donations. Private organizations have to be a qualifying non-profit for your donation to count against taxes. In other words, it has to be what’s known as a 501(3)(c). You can check if an organization is qualified to receive tax-deductible donations here.
Other types of entities can receive deductible donations as well:
- Veteran’s organizations.
- Fraternal lodges if your donation is used only for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals.
- Government-run facilities and organizations, as long as the donation is for public purposes only.
What do you get to deduct? Cash is 100% deductible. Property is valued at the fair market value in the condition at the time you donate. Your time or services (like the effort to complete a DIY project, for example) is not deductible. In any case, you will need receipts and photos for your records in case you are ever audited. If your donations are large compared to your income there may also be a limit to how much you can deduct. Your tax software or professional will can help you with that.
Ideas for Donations
Donate your wedding dress. There are several organizations that specialize in finding wedding gown new homes. Check the wedding donations ideas pin board for some of them.
Give leftovers to a food pantry or soup kitchen. Organizations that feed the hungry are always in need of good, nutritious food. If you plan a bit ahead and find one that can accommodate perishable food and desserts in bulk, your leftovers can feed those in need and you can deduct your cost. You can find local places that accept food through the National Hunger Hotline (Whyhunger.org) or Feeding America (FeedingAmerica.org).
Drop off extra and usable decorations to Goodwill. Make sure to ask for a receipt. You also need to document the condition of each item because that determines how much you can deduct. Search for local branches at Goodwill.org.
Give your flowers to a non-profit. There are organizations popping up across the country that will take fresh flowers you no longer need and deliver them to people in need of a day-brightener. Ask your florist if she knows of any in your area.
Instead of spending money on favors or another element of your wedding, donate to a charity. Let guests know by placing charity cards on the tables.
A popular tip going around is to have your reception at a museum or historical landmark, in which case your facility fee would be deductible. This can be very risky. The law clearly states if you get benefits from your donation it does not count as a deduction. If you donated solely to support the venue, please do so. Also, if paying more than the usual cost you can deduct the excess. But if it’s only for the tax benefit, there are no net savings.
There you have it, five ideas for using your wedding expenses to reduce taxes. Do you have any other ideas?