Americans are by and large a giving bunch. IRS data from the 2007 through 2009 tax years show that an average of around 37 million taxpayers each year claim charitable deductions when they itemize on Schedule A. Donations can be cash, which in the IRS' eyes means money, checks or charges to credit cards. Or the gifts can be household goods, vehicles, appreciated assets or even the calculation of miles driven in doing charitable work.
These various gifts to qualified organizations -- and for which the donor should have receipts in case the IRS has questions about the gift -- help reduce taxpayers' taxable income, which means lower tax bills.
The donations also mean less money for Uncle Sam. Between 2011 and 2015, this deduction -- excluding donations for education and health -- will mean the U.S. Treasury will be out an estimated $186 billion. The amount would have been even larger, but Congressional calculators didn't include donations to education and health care institutions.