Whether it’s sponsoring an event, contributing to a worthy organization or donating items to a charity, many people give throughout the year. But, there are several things to remember when it comes to tax time.
First, in order to claim a charitable deduction on your tax return, you must do two things:
- Have a bank record or written communication from a charity for any monetary contributions.
- Get a written acknowledgment from the charity for any single donation of $250 or more.
Here are six things for taxpayers to remember about these donations and written acknowledgments:
- If you make a single donation of $250 or more to a charity, you must have one of the following:
- A separate acknowledgment from the organization for each donation of $250 or more.
- One acknowledgment from the organization listing the amount and date of each contribution of $250 or more.
- The $250 threshold does not mean adding up separate contributions of less than $250 throughout the year.
- For example, if you give a $25 offering to your church each week, you don’t need an acknowledgement from the church, even though your contributions for the year are more than $250.
- Contributions made by payroll deduction are treated as separate contributions for each pay period.
- If you make a payment that is partly for goods and services, your deductible contribution is the amount of the payment that is more than the value of those goods and services.
- You must get the acknowledgement on or before the earlier of these two dates:
- The date you file your return for the year in which you made the contribution.
- The due date, including extensions, for filing the return.
- If the acknowledgment doesn’t show the date of the contribution, then you must also have a bank record or receipt that does show the date.
Please let us know if we can answer any questions for you as you prepare your year-end tax information.