At BHT&D CPAs, we get many questions regarding the documentation required to deduct charitable donations. The documentation required depends on the type and amount of the donation.
- If the cash donation is $250 or less, you may use any of the following as proof of donation:
- A bank statement or cancelled check
- Payroll deduction records
- A written communication from the charity that includes the name of the charity, the date of the gift and the amount donated.
- If the contribution of cash is $250 or more, you must have written communication from the donee organization that contains the name of the organization, the date of the gift, the amount donated and a description of the gift.
- Like cash gifts, if the donation of property is $250 or more, you must have written communication from the donee organization that contains the name of the organization, the date of the gift, the amount donated and a description of the gift.
- If the donations are more than $500 but not more than $5,000, a description of the contributed property must be attached to your income tax return. C corporations are excluded from this requirement.
- If the donations are more than $5,000, you must get a qualified appraisal.
There are certain types of property, such as vehicles, that the above rules do not apply to. If you donate a vehicle, boat or airplane, you must get a form 1098-C from the organization and attach it to your income tax return.
The Tax Cuts and Jobs Act almost doubled the standard deduction for taxpayers to $24,000 for married filing joint filer s and $12,000 for single filers. Many individual taxpayers who have itemized deduct ions in the past will take the standard deduction on their 2018 return. Those that do not itemize will not be able to take advantage of the deduction for charitable donations.
Donations must be to a qualified organization. Qualified organizations include nonprofit organizations that are charitable, religious, educational, scientific and literary in nature. The IRS has a tool to check if an organization qualifies. Please see this link for the IRS website: https://www.irs.gov/charities-non-profits/tax-exempt-organization-search
You can download our Charitable Donations Worksheet to get an idea of the value of your potential donation.
If you would like to discuss your gift giving or would like help in determining what documentation you need, please contact one of our CPAs at (616) 642-9467 or request a complimentary accounting consultation.
By: Andrea Bohez