As the year winds down, many people look for ways to support the charities they care about. If you plan to itemize deductions on your tax return, keeping proper documentation for your charitable donations is critical. Without it, you could risk losing valuable deductions. The rules vary depending on the type and size of your gift. Here's what you need to know:
Cash Donations
- Under $250
A simple canceled check will suffice, or you can ask the charity for a receipt or another reliable written record. This documentation should include the charity’s name, the date, and the amount of the gift.
Tip: If you make multiple small donations (like monthly contributions), you don’t need to combine them to meet the $250 threshold.
- $250 or More
You’ll need a contemporaneous written acknowledgment from the charity. This document should state the amount of the donation and whether you received anything in return (such as a thank-you gift like a book or event ticket). If you did, the acknowledgment must specify the item’s fair market value so you can subtract it from your deduction.
Important: “Contemporaneous” means you must receive the acknowledgment before your tax return is due (including extensions) or the date you file your return, whichever comes first.
Noncash Donations
- Under $250
Keep a receipt from the charity that includes its name, the date and location of the donation, and a description of the donated property.
- $250 or More
A contemporaneous written acknowledgment is required, just like for cash gifts, but it must also include a description of the donated property. If your total noncash contributions exceed $500, you’ll also need to file Form 8283 with your tax return.
- More Than $500
In addition to the requirements above, keep detailed records about the property, including how and when you acquired it and your adjusted basis (the value for tax purposes).
- More Than $5,000 ($10,000 for Closely Held Stock)
Along with everything mentioned above, you’ll need a qualified appraisal. Submit an appraisal summary signed by both the appraiser and the charity with your return.
Exception: Appraisals aren’t required for publicly traded securities.
- More Than $500,000 ($20,000 for Art)
For these substantial donations, include a complete copy of the signed appraisal—not just the summary—with your tax return.
Why It Matters
While saving on taxes isn’t the only reason to give, understanding the substantiation requirements can help ensure your generosity doesn’t go unrewarded. Proper documentation protects your deductions and gives you peace of mind, leaving you free to focus on making a difference.
The HoganTaylor Tax Practice
If you have any questions about the content of this publication, or if you would like more information about HoganTaylor's Tax practice, please email Tony Otto, Tax Practice Lead, at jotto@hogantaylor.com.
INFORMATIONAL PURPOSE ONLY. This content is for informational purposes only. This content does not constitute professional advice and should not be relied upon by you or any third party, including to operate or promote your business, secure financing or capital in any form, obtain any regulatory or governmental approvals, or otherwise be used in connection with procuring services or other benefits from any entity. Before making any decision or taking any action, you should consult with professional advisors.
