Tax Benefits of Donating to Islamic Charities: What You Need to Know for 2026
UMMA Farm Team
Yes, Your Donations Are Tax-Deductible
If you donate to a registered 501(c)(3) nonprofit like Umma Foundation, your contributions are tax-deductible on your federal income tax return. This applies to cash, property, stocks, and other assets.
How Much Can You Deduct?
For 2026:
- Cash donations: Deduct up to 60% of your adjusted gross income (AGI)
- Stock/property donations: Deduct up to 30% of AGI
- Carryover: Excess deductions can be carried forward for up to 5 years
Standard vs. Itemized: You must itemize deductions on Schedule A to claim charitable donations. If your total itemized deductions exceed the standard deduction ($14,600 single / $29,200 married filing jointly for 2026), itemizing saves you more.
Documentation You Need
- Under $250: Bank record or receipt from the organization
- $250 or more: Written acknowledgment from the organization (letter or email confirming donation amount, date, and that no goods/services were provided in return)
- Over $500 in non-cash: Form 8283 required
Verify the Organization's Status
Before claiming a deduction, verify the organization is a qualified 501(c)(3). You can check using the IRS Tax Exempt Organization Search tool.
Umma Foundation is a verified 501(c)(3) nonprofit. Tax ID: 86-3883211.
Smart Giving Strategies for Tax Efficiency
Donate Appreciated Stock
If you donate stock that has increased in value, you deduct the full current market value AND avoid capital gains tax on the appreciation. This is one of the most tax-efficient ways to give.
Bunching Donations
If your annual giving doesn't exceed the standard deduction, consider "bunching" — making two years of donations in one year to exceed the threshold and itemize.
Donor-Advised Funds (DAFs)
Contribute to a DAF for an immediate tax deduction, then direct grants to organizations like Umma Foundation over time.
Double Benefit: Tax Deduction + Sadaqah Jariyah
When you donate to UMMA Farm, you get a tax deduction on this year's return AND create sadaqah jariyah that generates rewards for years to come. That's a benefit in this life and the next.