The IRS has issued a reminder to taxpayers of the importance of receiving and maintaining records to support their charitable donations before claiming those donations as deductions on their income tax returns. These reminders apply to charitable donations in general and for certain specific types of donation items.
General Record Keeping Guidelines for Charitable Donations
Recording keeping is required in support of any income tax reduction of a qualifying charitable donation. This is especially true for charitable donations of gifts valued at $250 or more or for the donation of vehicles.
To claim a deduction for a charitable donation of $250 or more, the taxpayer must receive a written receipt from the charity. This requirement applies whether the donation was in the form of cash or property. For the charitable donation of property, the receipt must include a written description of the property donated.
In addition, the taxpayer must have physical possession of the written receipt before they submit the donation as a deduction on their income tax return. The taxpayer does not submit the receipt with their tax return. Rather, the taxpayer must maintain the receipt as evidence in the event the IRS audits their tax return.
Finally, taxpayers who donate property or any other noncash contribution must completed Form 8283 and include it with their tax return.
Other General Charitable Donation Requirements
Taxpayers may claim a deduction on their tax return for charitable donations only when the organization to which they make the donation is a qualified organization. Typically, churches and government agencies are considered charitable organizations, as well as other organizations recognized by the IRS. The IRS maintains a list of recognized charitable organizations in their Select Check tool.
In addition, taxpayers must choose to itemize their deductions on Form 1040 Schedule A in order to claim a deduction for a charitable donation. Taxpayers who use Form 1040A and 1040EZ likewise cannot claim charitable deductions.
A taxpayer will benefit from choosing to use itemized deductions only when the tax savings exceeds the amount of the taxpayer’s standard deduction.
Special Requirements for Donation of Motor Vehicles
For the donation of a motor vehicle, including cars, boats, and airplanes, the amount of the deduction allow on the taxpayer’s income tax return is limited to the gross proceeds from the sale of the vehicle. The charity receiving the vehicle must provide the taxpayer a completed Form 1098-C or similar documentation. The taxpayer must include the completed Form 1098-C with their tax return.
Requirements for Clothing and Household Items
To claim a donation for clothing, furniture, and other household items, the items must be in at least good condition. When the value of an item exceeds $500, the condition of the item does not matter if the taxpayer obtains a qualified appraisal of the item’s value.
Requirements for Monetary Items
To claim a donation of monetary items, the taxpayer must have a bank statement or other written documentation from the charity. Monetary items include donations made by check or cash, the electronic transfer of funds, payroll deductions, and credit card charges.
Written documentation from the charity must include the name of the charity and the date of the donation. Records from the bank must include the cancelled check or credit card statement as appropriate.
Where can I get additional help with questions about charitable donations?
If you have additional questions about charitable donations and record keeping, you can get answers to those questions from a tax attorney. A tax attorney is the only person who will have the training and experience to answer your questions, along with the confidentiality of attorney-client protection offered to their clients.
You can speak with a tax attorney by calling the phone number located at the top of this web site or by completing the form below. Since the first consultation with a tax attorney is free of charge, you have every reason to get help with your income tax return today.
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Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.