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Home » Donating

Charitable Tax Deductions & the Ambiguous Donation Receipt

Last updated by on 22 Comments

Prior to my current day job, I worked in fundraising for a 501(c)3 charitable organization.

In that role, the most common questions I received were around tax deductions and donation receipts.

“Do I have to have a receipt to deduct my donation?”

“What amount of donation do I have to have a receipt for?”

“I only need a receipt if my donation is over $250, right?”

I got these types of questions so often, that upon reflection today, it makes me wonder if people avoid itemizing their donations at all, for fear that they might get audited by the IRS. Taking it a step further, are people avoiding donating altogether because they don’t know how to properly document and deduct them? That would truly be a shame.

If you itemize your taxes, you should DEFINITELY deduct your charitable contributions!

To help clear up some of the confusion around what SHOULD be an easy topic, I decided to put together a little guide on deducting charitable donations and when you need proper documentation, such as a donation receipt or written acknowledgment.

Donations & Standard Deductions

donation receipt

First off, it’s worth noting that if you don’t itemize (like 60% of the country), a donation receipt is not needed because you won’t be deducting your donation. Remember that all taxpayers are eligible for a standard deduction. The standard deduction is currently $5,950 for individuals and $11,900 for married couples filing jointly.

To deduct a charitable contribution, you must file Form 1040 and itemize deductions on Schedule A.

So, if you know 100% you won’t be itemizing, don’t worry about donation receipts. If you aren’t sure, or will itemize, collect the receipts throughout the year. I personally file all receipts in a folder as soon as I make the donation.

It’s also worth noting that you do not need to turn in your receipts when you file your taxes. But you would need them if you were to be audited, to furnish proof of your donation.

When to Deduct your Donation

You deduct your donation in the year when you actually make it. If you mail a check in 2012 and the charity doesn’t cash it until 2013, your deduction is for 2012. For non-cash donations, you deduct in the year that the property was given. The exception is you can carryover deductions from any year in which you surpass the deduction limits (discussed next), up to a maximum of 5 years.

Deduction Limits

Most of us will never have to worry about this, but essentially if your donations are 20% or less of your adjusted gross income, you do not need to worry about hitting the limit. There are a few exceptions where you can go up to 30% or 50% of your AGI, and if you approach those levels, you should read the deduction limits section of IRS form 526 for more information. Generally, you can deduct cash contributions in full up to 50% of your adjusted gross income,property contributions in full up to 30% of your adjusted gross income, and appreciated capital gains assets in full up to 20% of your adjusted gross income.

What Organizations are Considered Qualified for a Deductible Donation?

The IRS has a tax-exempt organization search to find if donation you would like to make to the would be tax deductible to that organization. The organization must be designated as a 501(c)3.

Note that donations to political entities are not tax deductible. Sorry, Super PACS.

Donation Receipts

Whether you need a receipt or not depends on whether the donation is cash or non-cash, and the amount, or value of the donation.

Cash Donations:

If you deduct a cash donation, regardless of amount, you must keep some form of documentation. But there’s an important distinction between donations under and over $250.

  • Single or Multiple Cash Donations Under $250: you can provide a receipt from the organization, bank record, credit card statement, or cancelled check that shows the name of the organization, the date of the donation, and the amount. If the donation was a payroll deduction, your donation receipt here is your W2, a paystub, or some other form of payroll proof provided by your employer.
  • Single Cash Donations Over $250: the key difference when you go over $250 is you must receive a written acknowledgement from the recipient of your donation in order to claim the deduction. The written acknowledgement must include: amount of cash you donated, whether you received any goods or services in return, the value of those goods or services and (excluding religious faith value). Note that the date of donation must either be included in the acknowledgment or proved by bank record.
  • Multiple Cash Donations Over $250: same rules as under $250 apply, so long as no single donation was over $250. You only need written acknowledgment from the charity on the single donations over $250.

One key takeaway is this – never give actual “cash” as part of a cash donation. Use your credit card or check, so you have record in case the IRS comes calling.

Non-Cash Donations:

Varying rules apply, based on the level of donation.

  • Under $250: get and keep a receipt showing name of organization, date and location of contribution, reasonably detailed description of property, and the fair market value of the donation (many tax software programs will help you determine this, but you can find out more in IRS publication 561). However, the IRS does say that you are not required to provide receipt when it is impractical to get one (i.e. an unattended drop site).
  • At least $250 but no More than $500: just like with cash donations, when you go over $250, you must receive a written acknowledgment from the organization in addition to everything listed in the “under $250″ section.
  • Over $500, but no More than $5,000: everything in “at least 250, but no more than $500″ is required. You must also include how you got the property, the date you received it, and the cost basis of the property.
  • More than $5,000: Everything in “$500-$5,000″ but also a qualified written appraisal from a qualified appraiser.

For more on deducting charitable contributions, check out IRS form 526 or publication 1771.

Donation Receipt Discussion:

  • Have you avoided donating because you didn’t know how to properly document with a donation receipt?
  • Have you not itemized a donation because you were worried you didn’t have proper documentation?
  • Have you ever been audited and not had a proper donation receipt?

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About the Author
I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You'll also find every post by category & every post in order.


22 Comments »
  • Fatchance says:

    I used to donate my cars but was told by a CPA about the need for written appraisal so I just gave the last one away to a relative in need. In the past I gave all my old cars to a local place and claimed high blue book.

    But you have me inspired G.E. I am going to up my payroll deduction to a much higher level to give back to a local place called Down Home Ranch that helps people with Downs Sydnrome in Elgin Tx. I love the work they do and I do not give enough right now.

    I had a question of donating time/skills to a charity. Can you put a value on that and deduct that?

  • Emily @ evolvingPF says:

    We donate what feels like a lot of money but it was only barely enough to itemize our deductions in one year since we don’t have any other qualified deductions. I always save my receipts though just in case something changes by tax time.

  • David says:

    Having worked with a non-profit for many years I would ask that people please donate via check rather than credit card. Same result in terms of furnishing proof, but the organization does not get slammed with fees

  • Holly Thrifty says:

    One issue is when you give multiple donations, like clothing, throughout the year. Most organizations will not give you written acknowledgement for the sum of donations at the end. And, if you can’t show documented proof of exactly how much you gave–you’re out of luck.

    I try holding until I have one big donation, but sometimes that’s logistically impossible. So, I end up donating to several agencies just to be able to deduct it.

    Another issue is having volunteers take your donations of goods. My experience is they are not trained and getting documentation for your goods is nearly impossible. I’ve submitted lists AND my contact information and still can’t get a receipt.

  • Mike says:

    Totally off topic, but I’m excited to say I made an offer on my first house Monday night. I should hear back from the seller by Tuesday evening.

  • Pamela says:

    Thanks for covering this topic. I noticed last time that your donation to 501(c)3 or to a church are “evaluated” at different rates. If I remember correctly, your deductions went further along if you donated to a church rather than to public foundation, for instance. Is that correct? If so, would you please consider explaining that as well? Thanks!

  • Jesse K. says:

    If I give a donation with actual cash and they provide an end of year giving report, does that suffice? I have some extra cash on hand and would rather just give that than having to deposit it all and then write a check. I’ve worked with this organization in the past and they are good about giving formal giving receipts

  • Nicholas says:

    I give a larger chunk of my salary each year to charities. The tax deduction is a nice benefit. It gives you much more control over how your dollars are spent, which is always nice. My favorites are Cure International and St. Judes.

  • James says:

    Donation always help for the poor. So If one have so much money, What is the problem to donate some for the poor and needy?

  • AJ says:

    G.E. thank you so much for writing this. I get so confused, working for and donating to a nonprofit and others on whose boards I sit. In total it is quite a bit of money, but I’m never sure if they should be compiled or claimed individually. To make matters more confusing, I make at least two household items drops at the local Goodwill, and they always provide a receipt.

  • Ron Ablang says:

    I don’t know about you guys but even w/ a house my deductions don’t usually beat the standard deduction (married).

  • Daniel says:

    Is it possible for a fundraising company to issue a tax receipt if I make my donations done through that company? If so, what would have to work in order for everything to be correct?

  • Michael says:

    I usually get a bonus that arrives around Christmas, so I’ll send a year end donation a few days before the end of the year. Of course it arrives after the end of the year, and the end of year statement from the nonprofit organization never includes it. I always have to ask them to update my receipt.

    Is it allowed to not get the receipt updated, but just deduct the correct amount and trust that that gift will show up on the next year’s receipt? I’d also keep documentation showing when that was sent in case of an audit.

    • Michael says:

      Nope, you need to get it updated and receive the updated copy before you submit your taxes.

      There must be some timing difference going on; (Your company isn’t sending it the same day to the non-profit??) or the organization isn’t properly recording items that are postmarked on the 31th of Dec but not received until later. These ought to be in the previous years statement . Let the non-profit know what the problem is so they can fix it! …….and jump on them immediately if yours is wrong…so you can get a corrected one immediately.

  • Chris says:

    I made a donation to a breast cancer organization through a local business. The business owner was hosting an event to raise money for breast cancer awareness. Unfortunately, I am now hearing that this business owner never donated the funds from his event, but pocketed them instead. Is there a way I can check this out for myself before I confront him on this?

  • Dayna says:

    We sell BBQ plates to fundraise for our non-profit Youth Rugby Club. When people buy our plates are they entitled to a donation receipt? I would think not since they are receiving something for their donation. I can understand if they are donating cash or items towards the plate sale. Can you comment on this?

  • J.P. says:

    Question: Is it true that assets of a 501 c must be sold at market value or donated to another 501 c?

  • laura says:

    I work with a non-profit adoption ministry. What do you suggest is a standard time frame for issuing donation receipts. Currently, we are issuing them monthly, but wanted to know if we should be more timely.

  • latoja says:

    I am doing a benefit for a friend and i was just informed that i need legal receipts for when i am going around and asking for donations! is this something i need to be doing? Most places that have donated didnt even ask me for a receipt or said no when offered it. Please help

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