When you donate to charity did you know that you need to show written documentation of your gift? Make sure you gather these documents before your appointment with your tax preparer.
To deduct charitable donation for your 2016 taxes, the IRS requires a written acknowledgement from the charity you donated to. This written acknowledgement is also known as a receipt from the charity you donated to. That receipt is often in the form of a letter. It should have the date between January 1st and December 31st of the year you are filing your tax return. It should be dated before December 31st of the year you are filing for your tax return. If you did not receive a receipt acknowledging your donation, contact the charitable organization you donated to.
Get a Tax Deductable Receipt When You Donate to Charity
Cash donations, no matter what the amount is, must have proof. If you drop $20 in an offering plate, and it isn’t in an envelope, sorry, you just get kudos for being a generous person, but not tax deduction. However, if you give that same gift in the form of a check of credit card, the canceled check or credit card receipt, that obviously states the charity’s name, that should be sufficient.
The best thing to do when you donate to charity is to develop the habit of requesting a receipt, just like you would for any expense. A reputable organization will be ready to hand one to you. When preparing the return, to protect you in case of an audit, your tax preparer may ask if you have adequate documentation for your donation.
What should be on the donation receipt when I give to a charity?
To start, when you receive a receipt from a charitable organization, make sure the date of the donation, name and address of the charitable organization you are giving to, are all visible. Next, make sure the amount is written on the receipt as well. And, if you are giving tangible good, itemize everything, we mean list it down to the detail. The IRS has a suggested value for goods. We have made it into a simple spreadsheet for your use. Feel free to download it here.
You must itemize your deductions. You report these deductions on the Schedule A of your federal tax return, Form 1040 lines 16-19.
Give consideration as to what organization you chose to give to. The charity must be approved by the IRS as a 501(c)3 charitable organization. Should you have any question as to the organization qualifying, simply ask to see the determination letter given by the IRS. Actually, most organizations will actually post the letter either on the wall of the location you are donating the item to, and/or they post it on the charible organization’s website.
Also, the IRS has the Exempt Organizations Select Check tool that you can look up the organization you are making your gift or call the IRS at 1.877.829.5500 .
What if I donate items or money to religious organization?
Again, when in doubt ask. For all intent and purposes, churches, synagogues, temples, and mosques are known as charitable organizations. Most of these religious organizations are on the IRS list, with some exceptions, and usually qualify as tax exempt organizations.
Can I get a tax deduction if I donate to a person versus an organization?
Sorry, donating to a specific people does not qualify for a tax deduction. In fact, when you make a donation, we recommend you give it with as few restrictions as possible, just to remove any question for the IRS when you give. So when giving to a fundraiser website such as any of these Top 10 Fundraising Websites, either accept the fact that you give because your just great person or make sure there is a qualifying organization set up up to receive funds on behalf of the cause they represent.
What about clothing drives for the homeless or a family whose house burns down?
It is very thoughtful to hold a collection or clothing drive for someone in your neighborhood whose home burnt down. Unfortunately, the tragedy in and of itself doesn’t qualify for a charitable deduction. Instead, when you donate to charity, think about partnering with an reputable organization that is such as Friends of the Homeless of the South Shore, The American Red Cross or the Cancer Society.
Do You Have Charitable Donations Questions?
We have provided a Donation Guide that you can use to list all that you have donated for that specific receipt. All you have to do it staple it as back-up for the donation. In the meanwhile, maybe you need some questions answered with regard to your taxes and charitable contributions. For more information about filing requirements, please contact Alex Franch, BS EA at 781.849.7200. Alex is an enrolled agent with the IRS. While you are on the call, make an appointment to have your taxes prepared and filed. Worthtax has locations in Quincy, Weymouth and Dedham or book your appointment online.
Charitable Contribution Sources and Resources
- Charitable Contribution: Tax Plan for Potential IRA-to-Charity Provision
- Time-Share Use as a Charitable Deduction?
- Don’t Expect the IRS to Take Your Word on Charitable Deductions – Substantiate
- Getting Married? See What Can Be Tax Deductible