1) Q: Is there a limit to how much charity can be deducted on my tax return?

A: Generally speaking contributions to public charities cannot exceed 50% of a taxpayer's income.

Example: A taxpayer made $50,000 in 2004 and contributed $500 to a hospital. The entire amount is deductible because the $500 is well below the 50% of the taxpayer's income.

2) Q: May donations given to a foreign charity be treated as an itemized deduction?

A: In general, foreign organizations are non-qualifying and donations given to them may not be deducted. However, certain Canadian, Israeli, and Mexican charities may be an exception.

Example: A taxpayer donates millions of dollars to a Russian charity. Money given to foreign charities is non-qualifying and the taxpayer cannot deduct these donations as an itemized deduction.