This article has been updated for the 2022 & 2023 tax years. 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. For example:
“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!
2020 Update: with the CARES Act legislation providing a number of financial COVID-19 relief measures, there was a new universal donation deduction of up to $300 for non-itemizers who claim the standard deduction (in addition to those who itemize). Additionally, you could claim a deduction of up to 100% of cash donations (previously 60%) in 2020 and 2021.
2021 Update: with the American Rescue Plan Act, the universal donation deduction was increased to $600 for married filing jointly tax filers, remaining $300 for other filers, in 2021.
2022 Update: sadly, the universal tax donation deduction has expired for 2022 and beyond, unless it is retroactively extended by Congress.
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 in 2022 & 2023
First off, it’s worth noting that if you don’t itemize (like a large majority of the country), a donation receipt is not needed because you cannot deduct your donation if you claim the standard deduction. In other words, all taxpayers are eligible for a standard deduction, and a small percentage will forego that in favor of itemizing deductions. The standard deductions are as follows:
2022 Standard Deductions:
|Filing Status:||Standard Deduction Amount:|
|Married Filing Separately||$12,950|
|Married Filing Jointly (& Surviving Spouses)||$25,900|
|Head of Household||$19,400|
2023 Standard Deductions:
|Filing Status:||Standard Deduction Amount:|
|Married Filing Separately||$13,850|
|Married Filing Jointly (& Surviving Spouses)||$27,700|
|Head of Household||$20,800|
Tax Reform Impact on Charitable Deductions
I wrote about this at length, but the “Tax Cuts and Jobs Act” (aka “Republican tax reform”) created a charitable donation deduction crash, because of the increased standard deduction amounts, starting with the 2018 tax year.
This dramatically reduced the number of itemized filers (by some estimates from 40% to 11%), which reduced the incentive to make charitable donations (but you still should, because you’re a good person and stuff).
It has been suggested by some that you “bunch donations” from multiple years in to one year in order to be able to itemize them. If everyone follows this strategy, however, it could have disastrous cash flow consequences for charitable organizations.
How to Value & Deduct a Charitable Contribution
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.
If you’re not sure how to place a valuation on your donation, the paid versions of the best tax software typically have some level of estimation built in to the program to help you with this.
When to Deduct your Donation
You deduct your donation in the year when you actually make it. If you mail a check in 2022 and the charity doesn’t cash it until 2023, your deduction is for 2022. For non-cash donations, you deduct in the year that the property was given. The exception is you can carry over deductions from any year in which you surpass the deduction limits (discussed next), up to a maximum of 5 years.
Most of us will never have to worry about this, but there is an IRS maximum charitable donation limit. 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.
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.
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.
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?
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?
Great question. You can deduct expenses (cost of driving to/from volunteer work, cost of purchasing tools for the work) but not time/skills, to my knowledge.
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.
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
Our non-profit prefers credit card, PayPal and similar types of donations over checks. The cost of handling checks and the high fraud rate means it’s a lot cheaper to pay the fees.
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.
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.
I’m sure this is forever later but I hope you got it!
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!
I have not heard of donations being evaluated at different rates, based on the nature of the 501c3. Did your church tell you that? ;-)
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
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.
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?
I disagree. There are plenty of folks who use “charities” as a way to get out of paying taxes, without actually promoting noble causes. I strongly believe one who thoroughly educate themselves on any organization prior to giving. This is extremely easy to do in todays information age – http://www.charitynavigator.com is a wonderful resource.
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.
I don’t know about you guys but even w/ a house my deductions don’t usually beat the standard deduction (married).
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?
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.
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.
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?
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?
Question: Is it true that assets of a 501 c must be sold at market value or donated to another 501 c?
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.
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
I itemize on my tax return. For charitable contributions, do I need to enter each charity separately (I have over 30 organizations), or can I enter “various” or some other description? Regardless, I have documentation for all the donations. Thanks, Mark
I am a teacher. People always ask for a receipt when they donate to a class fundraiser. The amounts are in denominations of $10.00-110.00. Can we create a receipt to prove that they donated?
I had a similar question. I dropped of bags of clothes, appliances, toys etc to a goodwill drop off and when I inquired about proof of donation for tax purposes the man wrote me out a reciept with paper and pen. Will this suffice?
We bought a complete above ground swimming pool and decided we don’t want to set it up. If I donate it to charity and I have the original sales receipt, how much of the amount paid can I deduct off my taxes? It may be better than paying the restocking fees and shipping. Thanks!
My single unmarried 34 year old son died in a freak accident over Labor Day. We have given all of his wonderful quality clothes to a local organization- Hope Ministries. Got a receipt. But we will be donating more than $500 value. When we file his final tax return for 2015, can we deduct all the contributions? We obviously do not have receipts of the purchase price. We also will be donating his bedroom, livingroom and kitchen furniture and all TV’s. All good quality. Whatever refund he gets from government will be going to a charity so we want to get the deduction. Can we do this and not fear being audited. How do we explain the large contributions?
Over and Under….but what about a one-time donation of EXACTLY $250? Your article doesn’t tell me. My subsequent search in irs.gov revealed that the difference is between a donation under $250 (tax receipt from charitable organization not required) and a donation of $250 or more (receipt required). A small detail – but just the detail I needed. Perhaps others need the same info….. Thanks for your posts!
We are a church and have a company that does our landscaping/mowing. If they would donate their services can we give them a donation receipt for tax purposes? If not, if they provide receipts for gas/oil they use, can we give them a donation receipt?
Thanks for this timely and thorough post. I do believe one element is missing for non-cash multiple donations. I give frequently throughout the year mainly to Goodwill and the fair market value every year is $1000+. I keep all my receipts and an itemized
list of the donations. Each individual donation is always less than $500, but by the end of the year I have donated well over $500 FMV. Am I required to fill out the cost basis and date acquired info in this case?
Does the IRS contact the 501(c)(3) to verify a contribution by a taxpayer? My sister’s girlfriend is being audited right now and furnished the agent with the letter from the church. Does the letter suffice, or do they call them directly to verify? She paid in cash (she is loaded$$$) and gave $12,000.00 in CASH – literally, CASH. 5 contributions throughout the year, equalling 12K.
Doesn’t the agent just pull up the form 990 and check for her name on the donor list? Or do they get that invasive?
What is the Maximum Charitable donation to a Non Profit for a single person who makes around $4o,000K per year?
Hello, I work for a non-profit in NYC. We receive donations from family foundations. Do we send a tax receipt or a thank you (non-tax) letter? Thank you.
Is there a penalty for issuing charitable contribution receipts that say a donation is tax deductible provided by a nonprofit if the donor already received a tax acknowledgment from the Donor-Advised Fund? Would it make sense for someone who can afford to have a donor-advised fund to use these receipts to commit tax fraud?