Giving and taxes
Is giving to a patient tax-deductible?
If you want your generosity to count on your taxes, it matters where the money goes. Money given straight to a person or family is a gift, even when it pays medical bills. Money given to a qualified charity is deductible. Here is how that works.
Gifts to a person are not deductible
The IRS treats money you give directly to an individual as a personal gift, not a charitable contribution. That includes Venmo, cash, checks and personal GoFundMe campaigns, no matter how good the cause. You cannot write these off. The good news for the family: personal gifts like these are generally not taxable income to them either.
That applies to John's family too. The Watkins family Venmo on this site is a personal gift. In Rachel's words, they are not asking for money; it is there only for people who feel led.
Paying a hospital directly
If you pay someone's medical bill directly to the hospital or doctor, it does not count against your gift-tax limits. It still is not a charitable deduction, though. For most people giving normal amounts, gift tax never comes up at all.
What is deductible
Gifts to a qualified 501(c)(3) charity can be deducted if you itemize. Charities that support kidney patients and living donors include:
- Alliance for Paired Kidney Donation, the paired donation program John's transplant center works with.
- National Kidney Foundation
- American Kidney Fund
Keep a receipt for every gift, and a written acknowledgment from the charity for any single gift of $250 or more.
The tax break for living donors
Many states give living organ donors a state tax break for expenses that were not reimbursed. Oklahoma residents can deduct up to $10,000 of unreimbursed costs from donating a kidney, like travel, lodging and lost wages, from their Oklahoma income. Check with your state's Department of Revenue for its rules.
This is general information, not tax advice. A tax professional can tell you what applies to you.
Common questions
Is money given to someone for medical bills tax-deductible?
No. The IRS treats money given directly to a person as a personal gift, even when it pays medical bills. Only gifts to qualified 501(c)(3) charities are deductible.
Are personal GoFundMe donations tax-deductible?
No. Donations to personal fundraisers are gifts. Only donations to fundraisers run by a registered charity can be deducted.
Is there a tax deduction for living kidney donors?
In many states, yes. Oklahoma lets living donors deduct up to $10,000 of unreimbursed donation costs from state income. Check your state's Department of Revenue.
Does the family have to pay taxes on gifts they receive?
Generally no. Personal gifts for medical needs are not taxable income to the person who receives them.
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