If you donate to a charity, you may be eligible for a tax deduction. In order to deduct the amount, you’ll need to keep records of each contribution you make. You should always have a hard copy record as proof of your deduction. This proof can include:
- A canceled check
- A monthly bank statement showing the front of the check
- Credit card or bank statement that states the entry for a charity
- An actual statement from the charity with their name, date of donation, amount donated, and contact information.
To deduct donations made to a church, you have to write a check each week. Otherwise, use church provided envelopes, which generally allot you a statement at the end of the year with the total amount of your donation. You’ll need documentation that you donated with a total amount, as the IRS will not just take your word for it.
Any cash donations, regardless of amount, need documentation to be deducted. There’s a false sense of belief that only donations over $50 or $100 require proof. That is not the case. All cash contributions should be documented.
If you donate over $250 in a single gift, the charity has to give you a written document that acknowledges the donation. This statement should include the charity’s name, contact info including physical address, date of donation, and the amount received. Additionally, if you didn’t receive any benefit for making the donation, the document should include the words “No goods or services were provided by the organization in return for the contribution.”
Deductions should be of fair market value for clothing, household items, food, furniture, or other goods. You have to determine the market value on your own, as the charity is not responsible for providing a value for your donation.
Keep your records as accurate and detailed as possible. List the condition of the item (new, good, excellent) somewhere on your document, and remember only items in good condition and above can be deducted.
If you donate a bag full of clothing to an organization, you need a list documenting everything in that bag in order to deduct it. And if you claim more than $250, you’ll need the charity to write a receipt to make the deduction valid.