Charitable donations through your Church or through other non-profit organizations can be a significant portion of your deductions on Schedule A. It’s important to make sure that you are documenting your donations the correct way, otherwise an IRS examination could disallow your deduction!
For any donations, whether they are cash or non-cash items, you should make sure to keep a list of the organizations you donate to, the date of the donation, and the amount of the donation.
For any donations of $250 or more, IRS requires that you must receive a signed acknowledgement of the donation from the organization. Without this, IRS could say that you don’t have enough proof to support your donation. This is true for both cash and non-cash donations.
For non-cash donations, IRS requires you to determine the fair market value of the item that is being donated. If your non-cash donations are less than $500, you can generally summarize what you donated. If you donate $500 or more, then IRS expects a more detailed listing of items and your tax preparer must complete Form 8283. If you donate a significant amount of non-cash items, a good practice is maintaining a list of items donated with pictures to prove their condition/existence.
If you donate a motor vehicle, you should obtain Form 1098-C from the organization receiving the vehicle. This will document things like the value of the car and the mileage.
For more information on Charitable Contributions, visit https://www.irs.gov/taxtopics/tc506 or look in IRS Publication 526, “Charitable Contributions”.
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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
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