Reminders for Charitable Contributions

Post Date: 8/26/11
Last Updated: 8/26/11


Taxpayers who itemize deductions can deduct cash contributions and the fair market value of most property that is donated to qualifying charitable organizations. Following are a few reminders taxpayers should be aware of to substantiate contributions.

Qualifying contributions. With 275,000 charitable organizations having their tax-exempt status revoked, it is important to consider a few reminders about charitable contributions. Taxpayers will want to make sure the donations they make will qualify for a tax deduction by verifying whether or not a charitable organization is a qualified organization. Donations made to an organization prior to the organization losing its tax-exempt status remain tax deductible. Donations made after the revocation date may still qualify to be tax deductible if the organization has been retroactively reinstated.

Timing of donations. Donations are deductible by the taxpayer in the year the charity receives the donation. For example, a taxpayer pledges a contribution of $1,000 and pays $300 in 2011 and $700 in 2012. The $300 contribution is deductible in 2011 and the $700 contribution is deductible in 2012. In addition, contributions by credit card or check at the end of the year are deductible if the charity receives the contribution on or before December 31. Even though the credit card may not be paid or the check not cleared until January, the contribution is deductible for the year received by the organization..

Value received in exchange for a donation. Taxpayers who receive something of value in return for the donation can only deduct the amount that exceeds the fair market value of the benefit received. For example, Bill donates $100 to a qualifying charitable organization and in exchange receives a ticket to an event valued at $20. Bill can only deduct $80 of the donation.

Larger donations. A taxpayer making any contribution of $250 or more must have written acknowledgement from the charity. The acknowledgement must contain the nature of the contribution (cash or goods), whether any goods or services were received by the taxpayer in exchange for the donation, and the amount of the donation. A taxpayer who makes contributions of an item valued at $500 or more must complete Form 8283, Noncash Charitable Contributions, and attach the form to his or her tax return. Taxpayers must obtain an appraisal for donations of an item worth more than $5,000.

Recordkeeping. Taxpayers should maintain records of contributions made during the tax year. For cash contributions, taxpayers should keep a copy of the cancelled check, credit card statement, payroll deduction record, or a written statement from the charity containing the date and amount of the contribution. Taxpayers should keep a record of the fair market value of goods being donated. Tax Materials, Inc. has Donation Trackers available through our ClientTaxTools Series available at
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