Charity and Donations: Why Good Records are Key to Claiming Gifts
Donors must get a receipt from the charity for all donations of $250 or more in cash. It must state that “no goods or services were received in exchange for the contribution”. For donations of property valued at $250 or more, the receipt must have a description of the items.
Special reporting requirements usually apply to vehicle donations. Taxpayers must attach any required documents to their tax return. The deduction for a car, boat or airplane is usually limited to the proceeds from its sale. This rule applies if it is valued at over $500. A statement must be provided to the donor and attached to the tax return.
Be sure any charity you are giving to is a qualified charity. Only donations to eligible charities are tax-deductible. Select Check is a searchable online tool available on IRS.gov. It lists most charities that can receive tax-deductible donations. Churches, synagogues, temples, mosques and government agencies are allowed even if they are not listed in the database.
Rules for Donations of Clothing and Household Items
- Furniture, clothing, electronics, appliances, and linens are qualified household items.
- Clothing and household items donated must be in good condition.
- Clothing or household items over $500 do not have to meet this standard if the taxpayer includes an appraisal of the item.
- Check out the log on our website. It allows you easy tracking of clothing donations throughout the year!
Cash Donations to Charity
- A taxpayer must have a bank record or statement from the charity to deduct any cash donation. Bank or credit union statements should show the name of the charity, the date, and the amount paid. Credit card statements should show the name, the date and the transaction posting date.
- Most taxpayers rely on year end statements from charities as proof of donations.
- Gifts are deductible in the year made. Donations charged to a credit card before the end of 2015 count for 2015, even if the bill isn’t paid until 2016. Checks count for 2015 as long as they were mailed before the New Year.
For more information on gift taxes, check out our post here.
(excerpted from IR-2015-48, www.IRS.gov)