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December 23, 2004 Little Change in Reported Tax-Deductible Charitable Giving by North Dakotans Donations to charities, humanitarian causes and public/private institutions, reported as itemized deductions on individual tax returns, saw little change between 2001 and 2002 in North Dakota. Contributions reported by North Dakotans as itemized deductions on their individual income tax returns totaled $161.3 million in 2002, compared with $162.9 million in 2001, a decline of 1 percent. For tax returns with contributions listed as itemized deductions, contributions averaged $3,124 per return in 2002, relatively unchanged from $3,187 in 2001. Nationally, average charitable contributions (reported as itemized deductions) declined 1 percent as well, from $3,494 in 2001 to $3,461 in 2002. This month’s “Economic Briefs,” a monthly publication from the North Dakota State Data Center at North Dakota State University, focuses on the charitable nature of North Dakotans by looking at charitable contributions reported as itemized deductions on federal individual income tax returns. The Internal Revenue Service (IRS) publishes selected state data (including tax-deductible contributions or donations) from individual tax returns filed the previous calendar year. Unfortunately, there are limitations with the use of IRS data to explore trends in donations or charitable giving within North Dakota. Only a small number of North Dakotans itemize their deductions on their federal individual income tax return. According to 2002 tax data, 20 percent of North Dakota taxpayers chose to itemize deductions on their tax returns (third lowest percentage in the nation). A mortgage is one of the primary reasons for itemizing deductions and 28 percent of households in North Dakota are owner-occupied with a mortgage, the second lowest proportion in the nation. This is due in part to the fact that North Dakota has the 12th highest proportion of renters in the nation (33 percent of all households). In addition, North Dakota has the second highest proportion in the nation of homeowners without a mortgage (42 percent). For taxpayers who take the standard deduction, no details on their donations are available through the IRS and itemized deductions only capture giving that is tax deductible. “Therefore, one should be cautious in using IRS data to draw conclusions regarding how our state compares to others with regard to charitable contributions,” says Richard Rathge, State Data Center director. “Nonetheless, the IRS database is one of the few uniform means of tracking contributions over time and by state.” ### Source:
Richard Rathge, (701) 231-7980 Fax: (701) 231-9730, richard.rathge@ndsu.edu
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North Dakota State University |
