What this calculator does
Applies to the United States (federal income tax). This tool estimates how much of your charitable cash donation is tax-deductible and the resulting reduction in your federal tax bill. It assumes you itemize deductions on Schedule A and that your gift is cash given to a qualified 501(c)(3) public charity. The deduction limit used here is 60% of adjusted gross income (AGI), the cap that applies to cash contributions under current IRS rules. Gifts of appreciated property or to certain organizations carry lower limits (often 30% or 20%) not modeled here.
How to use it
Enter your adjusted gross income, the total cash you donated during the tax year, and your marginal tax rate (the rate on your top dollar of income — e.g. 24%). The calculator returns the deductible amount, the 60%-of-AGI cap, your estimated tax savings, and the net out-of-pocket cost of giving.
The formula explained
First the deductible amount is the smaller of your donation and the cap: \(\text{deductible} = \min(\text{donation},\, 0.60 \times \text{AGI})\). Then tax saved equals that deductible amount times your marginal rate: \(\text{taxSaved} = \text{deductible} \times \text{rate}\). Your net cost is simply the donation minus the tax you save.
$$\text{Tax Saved} = \min\!\left(\text{D},\, 0.60 \times \text{AGI}\right) \times \frac{\text{Rate}}{100}$$where
$$\left\{ \begin{aligned} \text{D} &= \text{Cash Donation (\$)} \\ \text{AGI} &= \text{AGI (\$)} \\ \text{Rate} &= \text{Marginal Rate (\%)} \end{aligned} \right.$$
Worked example
Suppose your AGI is $100,000, you donate $10,000 in cash, and your marginal rate is 24%. The cap is \(0.60 \times 100{,}000 = \$60{,}000\), so the full $10,000 is deductible.
$$\text{Tax Saved} = 10{,}000 \times 0.24 = \$2{,}400$$and the net cost of your gift is $7,600.
FAQ
Do I have to itemize? Yes — the deduction only helps if your total itemized deductions exceed the standard deduction. Otherwise your tax savings from giving may be $0.
What about donations above 60% of AGI? Amounts over the cap aren't deductible this year but can generally be carried forward for up to 5 years.
Is this tax advice? No. This is an estimate for planning. Consult a tax professional and confirm current-year IRS limits before filing.
