To claim a deduction for a charitable donation, you must have certain documentation. The current tax law requirements are summarized below.
Cash contributions under $250 require a bank record and date and amount of contribution. Cash contributions of $250 or more require written acknowledgement stating whether charity provided goods/services in exchange for gift. Contributions withheld from payroll require the pay stub or Form W-2 that shows amount withheld for charity.
Property contributions less than $250 require receipt or letter from charity stating: name of organization, date and location of contribution and property description. Property contributions from $250 to $500 require written acknowledgement whether goods/services were provided in exchange for gift. Property contributions from $500 to $5,000 require Form 8283 filed with tax return stating: how and when property was acquired and cost or basis of property. Property contributions of $5,000 or more require a qualified appraisal (exceptions apply) filed with Form 8283.
Additional Tips- Here are some other points to keep in mind.
Multiple contributions. If you make multiple contributions of less than $250 to the same charity during the year, you generally should treat each contribution separately in determining the amount of the contribution and the supporting records you should have.
Donations of clothing and household items. To be deductible, these donations must be in “good used” condition or better unless you are claiming a deduction of over $500 and include a qualified appraisal of the item with your return. If you can’t get a receipt from the charity because you left items at a charity’s unattended drop site, note the charity’s name, the contribution date, and a description of the items you donated and keep it on file. Also note the donated items’ fair market values and how you determined the values.
Text message donations. If you donate money by sending a text message — to a disaster relief charity, for example — the donation will be routed through the cell phone company you use. The company forwards the amount you donate to the charity, and the charge appears on your bill. Therefore, the telephone bill showing the date and amount of your donation to the organization will serve as the proof you need to substantiate your contribution.
Everyone’s charitable gifting is different. Consult with a tax professional at Urbach & Avraham, CPAs about your charitable donation documentation.