Keeping Records of Donations for Taxes
Keeping good records of donations is important if you plan to deduct the donations on your IRS tax forms. The Internal Revenue Service has explicit rules regarding the deduction of charitable donations--rules that require individuals to keep records such as receipts, canceled checks and written acknowledgment of the gift from the organization that received the donation. Without the proper paperwork, your charitable contributions will not be eligible for deduction.
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Instructions
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Keep a record of cash donations, such as a bank statement, credit card statement or canceled check. The record must show the name of the organization that received the donation, the date of the contribution and the donated amount. A receipt from the organization is also acceptable, provided that it gives all of the necessary information as stated above. If your employer deducted the cash donation from your paycheck, you must provide a pay stub, W-2 form or another document from your employer that proves how much you donated and which organization you donated to. In addition, keep a copy of the pledge card--or a related document--that gives the charitable organization's name.
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Obtain a written acknowledgment from the charitable organization for all one-time cash donations that exceed $250. This acknowledgment must be a written, detailed amount of the contribution and give information on any gifts that you received in exchange for the donation. If you received a gift, include a good faith estimate on the value of in your records. It is not necessary to valuate small tokens of appreciation or membership benefits.
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Get a receipt for all non-cash donations that are under $250 in value. The receipt must give information on the charity, a description and value of the items that you donated and the date you donated the items. If you donated items at an unattended drop site, the IRS considers it unrealistic to expect you to have obtained a receipt, and therefore does not require one in this case.
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Obtain a written acknowledgment for non-cash donations valued from $250 to $500 from the charity that states whether you received any goods or services in exchange for your donation and a value for those goods or services. Provide this information along with all other proof of non-cash donations for gifts under $250 such as a receipt that gives the organization's contact information, a description of the donated items and the date you made the donation.
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Include information in your records regarding where you obtained the item that you donated to charity if its estimated value is between $500 and $5,000. Include the approximate date that you received the item along with all of the necessary records for donations between $250 and $500.
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Have non-cash donations valued at over $5,000 appraised by a professional appraiser and include the appraisal report with the other necessary records of donations for items with a lesser value.
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Tips & Warnings
Small donations made on a weekly or monthly basis are counted individually--even if they exceed $250 in charitable gifts to the same organization over the course of a year. To count as a donation in excess of $250, you must make the gift all at once.
References
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