If you want to take a charitable contribution deduction on your income-tax return, you need to substantiate your gifts. You must have the charity’s written acknowledgment for any charitable deduction of $250 or more. A canceled check alone isn’t enough to support your deduction.
It’s your responsibility to obtain the charity’s acknowledgment (receipt), and you need to have it when you file your return. The acknowledgment must include:
– The amount of cash you contributed
– A description of any property you gave
– A statement as to whether the charity provided services or goods (a meal or tickets, for example) as full or partial consideration for your donation, plus a description and good faith value estimate of the services or goods
A charity may acknowledge each gift of $250 or more separately, or it may give you a single statement covering all your gifts. The charity does not have to place a value on property you donate. That’s still up to you.
Also, a charity must provide you with an acknowledgment for a donation of more than $75 that is partially a contribution and partially in exchange for goods and services from the charity. This acknowledgment must:
– Tell you that your deductible contribution amount is the donation minus the value of the goods or services
– Give you a good faith estimate of the value of the goods or services
IRS regulations on substantiating charitable deductions cover two more contribution types:
– Goods Or Services That Don’t Have Substantial Value
A charity doesn’t have to include token items in its acknowledgment. Examples of these items include posters, mugs, and key rings.
– Payroll Deduction Contributions
Donations that employers make on behalf of employees who have signed payroll deduction authorization cards can be a problem because the charity lacks the individual donor information needed to prepare its acknowledgments. To substantiate these payroll deduction contributions, you can use employer documents that show the amount withheld (payroll stubs, W-2 forms, or other employer reports) plus the charity’s pledge card or other document with a statement that you received no goods or services in exchange for your contribution.
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