Gifts to Charity: Make Sure to Get Written Acknowledgements

Throughout the year, many taxpayers contribute money or gifts to qualified organizations eligible to receive tax-deductible charitable contributions. However, taxpayers who plan to claim a charitable deduction on their tax return must do two things in order to properly support their claim on their federal income tax returns:

  1. Have a bank record or written communication from a charity for any monetary contributions showing the name of the charity, the date of the contribution and the amount of the contribution; and
  2. Get a written acknowledgment from the charity for any single donation of $250 or more.

Although it’s a taxpayer’s responsibility to obtain a written acknowledgment for any single donation of $250 or more, a charitable organization oftentimes assists a taxpayer by providing a timely, written statement containing the following:

  1. The name of organization;
  2. The amount of cash contribution;
  3. A description (but not the value) of non-cash contribution;
  4. A statement that no goods or services were provided by the organization in return for the contribution (if that was the case);
  5. A description and good faith estimate of the value of goods or services, if any, that an organization provided in return for the contribution;
  6. A statement that goods or services, if any, that an organization provided in return for the contribution consisted entirely of intangible religious benefits (if that was the case).

While a taxpayer should not attach the acknowledgment to his or her individual income tax return, the taxpayer must retain it to substantiate the contribution.

With respect to charitable contributions larger than $250, taxpayers should remember the following six guidelines about these donations and written acknowledgements:

  1. Taxpayers who make single donations of $250 or more to a charity must have one of the following:
    1. A separate acknowledgment from the organization for each donation of $250 or more; or
    2. One acknowledgment from the organization listing the amount and date of each contribution of $250 or more.
  2. The $250 threshold doesn’t mean a taxpayer adds up separate contributions of less than $250 throughout the year.
    1. For example, if someone gave a $25 offering to their church each week, they don’t need an acknowledgement from the church, even though their contributions for the year are more than $250.
  3. Contributions made by payroll deduction are treated as separate contributions for each pay period.
  4. If a taxpayer makes a payment that is partly for goods and services, their deductible contribution is the amount of the payment that is more than the value of those goods and services.
  5. A taxpayer must get the acknowledgement on or before the earlier of these two dates:
    1. The date they file their return for the year in which they make the contribution.
    2. The due date, including extensions, for filing the return.
  6. If the acknowledgment doesn’t show the date of the contribution, the taxpayers must also have a bank record or receipt that does show the date.

Charities depend on the generous support of the community to provide services to those in need. However, a taxpayer must follow the IRS’s written acknowledgement requirement to support a charitable deduction for any donations in excess of $250. Without it, a deduction may be challenged and result in additional taxes being owed. Remember no good deed goes unpunished (unless you get a written acknowledgement).

Throughout the year, many taxpayers contribute money or gifts to qualified organizations eligible to receive tax-deductible charitable contributions. However, taxpayers who plan to claim a charitable deduction on their tax return must do two things in order to properly support their claim on their federal income tax returns:

  1. Have a bank record or written communication from a charity for any monetary contributions showing the name of the charity, the date of the contribution and the amount of the contribution; and
  2. Get a written acknowledgment from the charity for any single donation of $250 or more.

Although it’s a taxpayer’s responsibility to obtain a written acknowledgment for any single donation of $250 or more, a charitable organization oftentimes assists a taxpayer by providing a timely, written statement containing the following:

  1. The name of organization;
  2. The amount of cash contribution;
  3. A description (but not the value) of non-cash contribution;
  4. A statement that no goods or services were provided by the organization in return for the contribution (if that was the case);
  5. A description and good faith estimate of the value of goods or services, if any, that an organization provided in return for the contribution;
  6. A statement that goods or services, if any, that an organization provided in return for the contribution consisted entirely of intangible religious benefits (if that was the case).

While a taxpayer should not attach the acknowledgment to his or her individual income tax return, the taxpayer must retain it to substantiate the contribution.

With respect to charitable contributions larger than $250, taxpayers should remember the following six guidelines about these donations and written acknowledgements:

  1. Taxpayers who make single donations of $250 or more to a charity must have one of the following:
    1. A separate acknowledgment from the organization for each donation of $250 or more; or
    2. One acknowledgment from the organization listing the amount and date of each contribution of $250 or more.
  2. The $250 threshold doesn’t mean a taxpayer adds up separate contributions of less than $250 throughout the year.
    1. For example, if someone gave a $25 offering to their church each week, they don’t need an acknowledgement from the church, even though their contributions for the year are more than $250.
  3. Contributions made by payroll deduction are treated as separate contributions for each pay period.
  4. If a taxpayer makes a payment that is partly for goods and services, their deductible contribution is the amount of the payment that is more than the value of those goods and services.
  5. A taxpayer must get the acknowledgement on or before the earlier of these two dates:
    1. The date they file their return for the year in which they make the contribution.
    2. The due date, including extensions, for filing the return.
  6. If the acknowledgment doesn’t show the date of the contribution, the taxpayers must also have a bank record or receipt that does show the date.

Charities depend on the generous support of the community to provide services to those in need. However, a taxpayer must follow the IRS’s written acknowledgement requirement to support a charitable deduction for any donations in excess of $250. Without it, a deduction may be challenged and result in additional taxes being owed. Remember no good deed goes unpunished (unless you get a written acknowledgement).

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