6600expenseNormal balance: Debitpersonal6600 — Gifts & Donations
Gifts & Donations covers two genuinely different kinds of giving that happen to share one account: money given to people you know, like a birthday or wedding gift, and money given to causes, like a charitable donation or religious tithing. Both are generous, but they are treated very differently once tax season arrives.
As an expense, it carries a normal debit balance. Only donations to a qualified charitable organization are typically tax-deductible if you itemize — a gift to an individual, no matter how generous or meaningful, is not deductible at all, and this account does not distinguish the two automatically even though the IRS very much does.
Because that distinction matters at filing time, it is worth keeping enough detail in memos or notes to separate the two later — a receipt from a qualified nonprofit is a very different thing at tax time than a birthday gift for a friend, even if both posted to the same account this month.
What belongs here
- birthday and holiday gifts
- wedding and baby gifts
- charitable donations to a qualified nonprofit
- tithing or religious giving
What does not belong here
- a gift to yourself — Shopping (6400)
- a business sponsorship or client gift, if you also happen to run a business — the business chart's Advertising (6000) generally, though large client gifts carry their own deduction limits; ask an accountant
- a loan to a friend or family member you expect back — not a gift at all, and this personal chart has no account for money lent out, worth knowing that gap
Where it shows up
Shows on the personal income statement. Only qualified charitable donations are typically deductible if itemizing — a personal gift to an individual is not, so keep enough detail to split the two apart at tax time.
Common questions
- Are gifts to friends and family tax-deductible?
- No — only donations to a qualified charitable organization are typically deductible if itemizing. A gift to an individual, however generous, does not qualify.
- How do I keep charitable donations separate from personal gifts for tax time?
- Keep enough detail in a memo or note on each transaction — this account does not separate the two automatically, but the IRS treats them very differently, so that detail matters when filing.