Lesson P202.8 · Personal Finance 202: Lead Your Family
Giving and generosity
4-minute read · Figures for tax year 2026
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The short answer
Give an amount you've chosen on purpose and written into your budget. Many families give first, often about 10% of their income, but the number is yours to pick. Give to the people and causes you care about: a church or other place of worship, a food bank, a youth league, a neighbor in a hard month, or your time. Before you give money to an organization, check that it's real.
How much: pick a number you'll keep
Money teachers agree that generosity is part of a good life. Dave Ramsey's budgeting method lists giving first, along with saving and the Four Walls (food, utilities, shelter and transportation to work). His Baby Steps come back to it at the end: Baby Step 7 is build wealth and give.
How much is your call. Some families give a percentage, some a set dollar amount. On seasonal pay, a percentage of each check rises and falls with the work, so the giving line shrinks in the slow months instead of squeezing them.
Example (made-up numbers). Tomas and Rosa give 10% of every check. In July they bring home $5,000 and give $500. In January, with only snow work coming in, they bring home $2,500 and give $250. Tomas also coaches his son's ball team two nights a week, and they count that as giving too.
Time counts. So does skill. A crew can patch a church lot, stripe a school's accessible parking spaces or clear a neighbor's driveway after a storm.
Give wisely: check before you give
- Look it up. The IRS Tax Exempt Organization Search shows whether a group is a recognized charity that can receive tax-deductible gifts. You can also ask the group directly; the IRS says most can tell you.
- Search the name with words like "complaint," "review" or "scam," and watch for names made to sound like a well-known charity.
- Take your time. Scammers push you to decide fast. A real charity will take your gift when you're ready.
- Pay the safe way. Give through the charity's own website or with a check made out to the charity. Never give by cash, gift card, cryptocurrency or wire transfer to someone demanding it.
The IRS's 2026 Dirty Dozen list of tax scams includes fake charities. Report one at ReportFraud.ftc.gov.
Taxes: what counts and what to keep
- New for 2026. If you don't itemize, you may deduct up to $1,000 of cash gifts to qualifying charities, or $2,000 if you're married filing jointly, on the return you file in 2027. Gifts to donor-advised funds generally don't count.
- Gifts to individuals aren't deductible, even when helping a family after a house fire is the right thing to do.
- Your time and skill aren't deductible either. The IRS says you can't deduct the value of your time or services. Ask a tax pro before you count anything you donate besides cash.
- Keep records. For any cash gift, keep a bank record or a written receipt from the charity. For a gift of $250 or more, get a written acknowledgment from the charity.
Your Move
Do this week
- Decide how much you'll give each month, as a percentage or a dollar amount.
- Add a giving line to next month's written budget, near the top.
- Look up any charity you plan to support in the IRS Tax Exempt Organization Search.
- Start a folder for giving receipts.
Log it: Added a giving line to our budget.
Common questions
How much should I give?
That's your call. Many families give first, often about 10%. Start with a number you'll keep and write it into the budget.
Can I deduct donations if I don't itemize?
For 2026, yes: up to $1,000 of cash gifts to qualifying charities, or $2,000 married filing jointly.
Is money I give to a family in need deductible?
No. Gifts to individuals aren't deductible. Give anyway if you want to, and verify the need first, especially online.
Watch out for
- Pressure to give right now, or demands for cash, gift cards, cryptocurrency or wire transfers.
- Sound-alike charity names.
- Fake charities, especially around the end-of-year giving season.
Free help
Free practice
Lesson check
5 questions on this lesson, one at a time, with the answer and the reason after each. Pass with 4 right, including every must-know question.
This is general education, not tax, legal, investment or insurance advice. Rules change and every situation is different. Check the sources below, and talk to a qualified professional before you act on it.
Sources
- Ramsey Solutions: How to budget an irregular income
- Ramsey Solutions: The 7 Baby Steps
- IRS: Tax Exempt Organization Search
- IRS: Topic 506, Charitable contributions
- IRS: Publication 6196, Charitable contribution deduction tips for non-itemizers
- IRS: Publication 526, Charitable Contributions
- IRS: Dirty Dozen tax scams for 2026
- FTC: Make your donation count by avoiding end-of-year charity scams