Gifts to Charity: Six Facts About Written Acknowledgments

Many taxpayers lose valuable charitable deductions each year because they don’t meet IRS documentation requirements. Understanding the charitable contribution written acknowledgment rules is essential before filing your return.

IRS Rules for Charitable Contritutions

Proper documentation is essential when claiming a charitable deduction. Understanding the rules around a charitable contribution written acknowledgment can help ensure your donation qualifies and withstands IRS scrutiny.

If you offer gifts or money to qualified organizations eligible to receive tax-deductible charitable contributions, you must do two things:

1. Have a bank record or written communication from the charity for any monetary contributions.
2. Get a written acknowledgment from the charity for any single donation of $250 or more.

Here are six facts you should remember about donations and written acknowledgments:

1. The $250 Rule for Charitable Contribution Written Acknowledgments

If you make single donations of $250 or more to a charity, you must have one of the following:

1. a separate acknowledgment from the organization for each donation of $250 or more, or
2. a single acknowledgment from the charity listing the amount and date of each contribution of $250 or more.

2. The $250 Threshold Applies to Individual Donations

The $250 threshold doesn’t mean you add up separate contributions of less than $250 throughout the year. For example, if you gave a $25 offering to your church each week, you don’t need an acknowledgment from the church, even though your total contributions for the year are more than $250.

3. Payroll Deduction Contributions Are Treated Separately

Contributions made by payroll deduction are treated as separate contributions for each pay period.

4. Deducting Contributions That Include Goods or Services

If you make a payment that’s partly for goods and services, your deductible contribution is the amount of the payment that exceeds the value of the goods and services.

5. Timing Requirements for Written Acknowledgments

You must get the acknowledgment for your donation on or before the earlier of these two dates:

1. the date you file your return for the year you make the contribution, or
2. the due date, including extensions, for filing the return.

If the acknowledgment doesn’t show the date of the contribution, you also must have a bank record or receipt or receipt that shows the date.

6. Make Sure the Organization Is Qualified

Of course, you also have to make sure the organization you are donating to is qualified. Not every nonprofit can grant you the right to an income tax deduction. You can donate to civic leagues, social and sports clubs, labor unions, and chambers of commerce, but you can’t deduct your gifts to these organizations as a charitable expense. The same goes for donations to candidates for public office.

Before filing your return, have Siepert & Co., LLP review your charitable contribution documentation to ensure your deductions withstand IRS scrutiny.