As a reminder following are the IRS rules for substantiating charitable donations. We encourage you to maintain the records necessary to support your claim for these donations in the event of an audit. Many taxpayers may not be able to deduct their charitable donations due to the increased standard deductions ($12,000 for singles/$24,000 for joint returns). However, if your itemized donations do exceed the standard deductions be prepared to provide adequate documentation.
Cash contributions: No charitable contribution deduction is allowed for any monetary gift unless the donor maintains, as a record of the gift, a bank record or a written communication from the donee, showing the donee’s name, the date of the contribution, and the amount of the contribution. The regulations require a contemporaneous written acknowledgment of contributions of $250 of more from the organization. For gifts under $250, a canceled check or other records by the taxpayer is sufficient.
Donations of property: Additional substantiation requirements apply when donations involve property. For property under $250, the donor must obtain a receipt from the donee or keep reliable records. A donor who claims a noncash contribution of at least $250 but not more than $500 is required to obtain a contemporaneous written acknowledgment. For a donation of more than $500 but not more than $5,000, the donor must obtain a contemporaneous written acknowledgment and file a completed Form 8283 (Section A), Noncash Charitable Contributions.
For claimed noncash contributions of $5,000 or more, in addition to a contemporaneous written acknowledgment, the donor must obtain and file a qualified appraisal with the filing of the tax return.
If you are uncertain if your documentation is adequate, contact our office for guidance on what is needed to include the donations on your 2018 tax return.
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Spencer Accounting Group, LLC does not provide investment, tax, legal, or retirement advice or recommendations in these blogs. The information presented here is not specific to any individual's personal circumstances.
Keana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion. Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients.