Accurate documentation is essential when claiming charitable contributions on your tax return. The IRS requires specific records depending on the type and value of your donations. Maintaining proper records ensures your contributions are deductible and helps you avoid issues if your return is ever reviewed.
General Documentation for All Donations
For any charitable gift, you should retain documentation showing the charity’s name, date of contribution, and amount donated. Acceptable records include:
- Bank or credit card statements reflecting the donation
- Canceled checks
- Payroll deduction statements (from your W-2, pay stub, or employer documentation)
Cash or Property Contributions Over $250
For cash or property contributions exceeding $250, you must obtain a Contemporaneous Written Acknowledgment (CWA) from the charity. This document should include:
- The charity’s name
- Date and amount of the contribution
- A description of any goods or services received in return and their estimated value
Example: A thank-you letter from the charity that includes these details is generally sufficient.
Non-Cash (Property) Contributions
The IRS has additional requirements for non-cash donations:
- Under $250: A receipt from the charity is sufficient.
- $250 – $500: CWA from the charity plus records showing the property’s cost, acquisition date, and fair market value (FMV).
- Over $500: IRS Form 8283 (Noncash Charitable Contributions) is required.
- Over $5,000: IRS Form 8283 and a qualified appraisal are required.
Key Considerations
- Itemize Deductions: Charitable contributions are only deductible if you itemize on Schedule A.
- Timeliness: Obtain all acknowledgments by the tax filing deadline, including extensions.
- Maintain Records: Keep all documentation with your tax records. You generally do not submit these forms with your return unless specifically requested by the IRS.
** Proper recordkeeping is critical to maximizing the tax benefits of charitable giving while ensuring compliance with IRS rules. Working with your tax advisor can help ensure all contributions are accurately documented and fully deductible.
