If you deduct any contributions to a qualified charity (registered 501[c][3] organizations), you must keep records to prove the amount you make during the year. The kind of records you must keep depends on the amount and type:
Cash (including check, EFT, debit/credit, and payroll deduction) :
You cannot deduct a cash contribution, regardless of the amount, unless you keep one of the following:
· A bank record that shows the name of the organization, date, and amount, such as a cancelled check or statement.
· A receipt or letter from the organization showing the name, date, and amount.
· For payroll deductions, a paystub, W2, or other document furnished by your employer showing all the same required information and a pledge card or other similar
document.
If the contribution was for $250 or more, you must have a acknowledgement (receipt or letter) from the organization. If you made more than one contribution of $250 or more, you must have either a separate acknowledgement of each, or a single one that lists the date and amounts.
You must also get a written acknowledgment for donations over $75 if the payment is partly a contribution and partly for some other good or service.
The acknowledgments in both cases must be written, include the amount, and whether you received any goods or services as a result of your contribution. If you did receive goods or services, the statement must also include an estimate of the value of such. If you did not receive goods or services, there should be a statement that says you did not and that the only benefit you received was intangible.
You must get the written acknowledgment before you file your tax return and before the due date of the return. If the statement does not show the date of the contribution, then you must also have a bank record or receipt that does show the date.
For payroll deductions over $250 (per single paycheck), you must also obtain a statement that shows you did not receive any goods or services in return for the contribution.
Noncash Contributions:
For noncash contributions less than $250, you must get and keep a receipt from the organization showing their name, the date and location, and a reasonably detailed description of the property. You are not required to get a receipt where it is impractical to do so, for example if you leave property at an unattended drop site.
In addition to the receipt, you must also keep reliable written records which include:
· The name and address of the charity
· The date and location of the contribution
· A description of the property in detail reasonable under the circumstances
· The fair market value of the property and how you calculated it
· The original cost or other basis of the property
· Any other pertinent information related to the property or conditions attached to the contribution
For noncash donations between $250 and $500, you must also obtain a written acknowledgement from the organization that includes a description of the property, and whether or not you received any goods or services in return - basically the same requirements as for cash donations discussed earlier.
For noncash donations between $500 and $5000, your records must also include details on how and when you originally got the property, and how much you paid for it.
Donations over $5000 additionally require a written appraisal by a qualified professional appraiser. In figuring whether your deduction is over $5,000, combine your claimed deductions for all similar items donated to any charitable organization during the year.
Out-of-Pocket Expenses :
If you provide services to a qualified organization and have unreimbursed out-of-pocket expenses related to those services, you must have adequate records to prove the expenses and if they are over $250, you must get a letter from the organization before you file your tax return and before the due date of the return.
If you claim expenses related to using your car for charity, you must keep reliable records, at or near the time of the expense. For example your records (a log or notebook kept in the car), should show the name of the organization you were serving, date, purpose, and the number of miles driven on that date.
For detailed information on this topic, refer to IRS Publication 526. Please let me know if you have any questions or concerns, this is only a general overview of the basic rules, and may not apply to your specific situation.
Tom Horner
The Tax Advantage
(925) 754-9299
Cash (including check, EFT, debit/credit, and payroll deduction) :
You cannot deduct a cash contribution, regardless of the amount, unless you keep one of the following:
· A bank record that shows the name of the organization, date, and amount, such as a cancelled check or statement.
· A receipt or letter from the organization showing the name, date, and amount.
· For payroll deductions, a paystub, W2, or other document furnished by your employer showing all the same required information and a pledge card or other similar
document.
If the contribution was for $250 or more, you must have a acknowledgement (receipt or letter) from the organization. If you made more than one contribution of $250 or more, you must have either a separate acknowledgement of each, or a single one that lists the date and amounts.
You must also get a written acknowledgment for donations over $75 if the payment is partly a contribution and partly for some other good or service.
The acknowledgments in both cases must be written, include the amount, and whether you received any goods or services as a result of your contribution. If you did receive goods or services, the statement must also include an estimate of the value of such. If you did not receive goods or services, there should be a statement that says you did not and that the only benefit you received was intangible.
You must get the written acknowledgment before you file your tax return and before the due date of the return. If the statement does not show the date of the contribution, then you must also have a bank record or receipt that does show the date.
For payroll deductions over $250 (per single paycheck), you must also obtain a statement that shows you did not receive any goods or services in return for the contribution.
Noncash Contributions:
For noncash contributions less than $250, you must get and keep a receipt from the organization showing their name, the date and location, and a reasonably detailed description of the property. You are not required to get a receipt where it is impractical to do so, for example if you leave property at an unattended drop site.
In addition to the receipt, you must also keep reliable written records which include:
· The name and address of the charity
· The date and location of the contribution
· A description of the property in detail reasonable under the circumstances
· The fair market value of the property and how you calculated it
· The original cost or other basis of the property
· Any other pertinent information related to the property or conditions attached to the contribution
For noncash donations between $250 and $500, you must also obtain a written acknowledgement from the organization that includes a description of the property, and whether or not you received any goods or services in return - basically the same requirements as for cash donations discussed earlier.
For noncash donations between $500 and $5000, your records must also include details on how and when you originally got the property, and how much you paid for it.
Donations over $5000 additionally require a written appraisal by a qualified professional appraiser. In figuring whether your deduction is over $5,000, combine your claimed deductions for all similar items donated to any charitable organization during the year.
Out-of-Pocket Expenses :
If you provide services to a qualified organization and have unreimbursed out-of-pocket expenses related to those services, you must have adequate records to prove the expenses and if they are over $250, you must get a letter from the organization before you file your tax return and before the due date of the return.
If you claim expenses related to using your car for charity, you must keep reliable records, at or near the time of the expense. For example your records (a log or notebook kept in the car), should show the name of the organization you were serving, date, purpose, and the number of miles driven on that date.
For detailed information on this topic, refer to IRS Publication 526. Please let me know if you have any questions or concerns, this is only a general overview of the basic rules, and may not apply to your specific situation.
Tom Horner
The Tax Advantage
(925) 754-9299
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