Many cemeteries are organized as nonprofit organizations, and people sometimes make donations to the cemeteries where their family members or other loved ones are buried. These donations can help with the upkeep of a cemetery and its grounds.
Generally, contributions to eligible cemeteries for general care of the cemetery are tax deductible whereas those intended for the care of a specific plot or crypt are not. Funeral expenses are also generally not tax deductible unless paid by the estate of the deceased.
Make Donations to Cemetery Organizations
Nonprofit cemetery companies are specifically listed in the Internal Revenue Service's list of allowable tax-deductible charity organizations, but there are certain restrictions on what types of donations are eligible and how much you can deduct.
Specifically, donations must be irrevocably made for the care of the cemetery as a whole and not for the upkeep of a particular plot or mausoleum belonging to some person or family. That's in line with other federal tax policies saying that you can't deduct the cost of funeral expenses, including the cost of buying a cemetery plot, crypt or other burial space.
You're also limited to what percentage of your income you can deduct for donations to cemeteries. Certain types of nonprofits are considered 50-percent organizations, meaning you can deduct at most half of your gross income in donations to them, while others are limited to 30 percent. Cemeteries are in the latter category, so if you make a larger donation to a cemetery in a particular tax year, you will still only be able to deduct 30 percent of your income. In some cases, you may choose to spread donations out over multiple years to maximize your income. You must itemize your deductions to claim charitable donations, so in some cases, it may save you more money to take the standard deduction instead.
As with all charitable donations and other deductions, you will likely want to get a receipt from cemetery organizations documenting your donations in case you are audited by the IRS. You may wish to ask that this receipt confirm your donation is for general upkeep and not tied to a particular burial site, particularly if you have loved ones in that cemetery since you can't get a deduction for a cemetery plot.
Volunteer work is also not tax deductible, so if you volunteer to mow the lawn, water the grass or pick up litter in a cemetery, your time is not tax deductible, although expenses you incur such as equipment or uniform costs can be.
Be Aware of Exceptions and State Laws
There is generally no tax deduction for buying cemetery plots from cemetery companies on your federal taxes, but an exception comes if you pay for the plot or other funeral expenses from the estate of the deceased person. In that case, you can subtract these costs from the taxable value of the estate for estate tax purposes.
States generally exempt cemetery plots and other cemetery land from property taxes.
Take Advantage of 2018 Tax Law Changes
In 2018, the standard deduction is $12,000 for individuals, $18,000 for heads of households and $24,000 for married couples filing jointly, so there may be fewer taxpayers who choose to itemize deductions, including charitable donations to cemetery organizations.
Similarly, the minimum taxed estate size roughly doubles to approximately $11 million, so fewer estates may claim deductions for cemetery plots and crypts.
Understand the 2017 Tax Law Situation
In 2017, the standard deduction is $6,350 for individuals, $12,700 for married couples filing jointly and $9,350 for heads of household. Itemized deductions, including those to cemetery companies, are generally only worth taking if they exceed that amount.
The estate tax limit is $5.49 million, below which inherited estates generally see no federal income tax.
- IRS: Charitable Contribution Deductions
- IRS: Publication 526 - Charitable Contributions
- IRS: Publication 529 - Miscellaneous Deductions
- Fifth Third Bank: Federal Estate Taxes: 5 Tax-Deductible Expenses Every Executor Should Know Excerpt from Fifth Third Bank LegacyLink.
- Washington State Legislature: Cemetery Property
- Forbes: https://www.forbes.com/sites/kellyphillipserb/2018/03/07/new-irs-announces-2018-tax-rates-standard-deductions-exemption-amounts-and-more/
- CNN: New Estate Tax Law Gives an Enormous Gives an Enormous Gift to Rich Families
- Forbes: IRS Announces 2017 Estate And Gift Tax Limits: The $11 Million Tax Break
- tax forms image by Chad McDermott from Fotolia.com