When you claim a tax deduction for donating to a charity, the IRS requires that you substantiate it. The type of proof depends on the amount you contributed and whether it’s cash or noncash property, like artwork.
This table provides a quick overview of the rules.
|Amount Contributed||Proof Required|
|Cash (less than $250)||Keep one of the following:|
If you make separate contributions to a charity in the same taxable year, the amounts are not combined. For example, if you donate $100 every month to a charity, you can avoid the substantiation requirement for contributions of $250 or more, even though the total gift is $1,200 for the tax year.
|Noncash Property (less than $250)||Keep a written receipt from the charity showing:|
The receipt does not need to include the noncash property’s value.
|Cash or Noncash Property ($250 or more)||You need to get written acknowledgment from the charity on or before the earlier of: April 15th of the year following the gift, or October 15th of the year following the gift if you file an income tax extension. |
Keep written acknowledgment from the charity showing:
|Noncash Property ($500 to $5,000)||The rules for noncash property less than $500 apply, and you also must keep the following records:|
($5,000 or more)
|Add up all noncash property contributions to find out if you exceed the $5,000 threshold for the tax year, even if you donate similar items to a variety of different charities. For example, if you donate $2,500 of artwork to five different charities, the total of $12,500 exceeds the $5,000 threshold.|
You’ll need to complete an appraisal summary (Section B of IRS Form 8283) and have the qualified appraiser sign this form. This needs to be completed within 60 days of the contribution and before your filing deadline. Make sure that you keep the actual appraisal and a copy of your tax return with your other important papers in case of an audit.
Make sure you review the charitable gift substantiation rules before making a charitable contribution. Specific IRS Code details when and how charitable gifts must be substantiated. Failure to get proper records in a timely manner may prevent you from receiving the tax deduction when you file your return. As always, consult your tax advisor for guidance related to your personal situation.
The tax information herein is not intended to be used and cannot be used by any taxpayer for the purpose of avoiding tax penalties. It was written to support the promotion of Advisory Services. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor. Examples included herein, if any, are hypothetical and for illustrative purposes only. Individuals should seek advice regarding their specific situation.
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