What is Giving Compass?
We connect donors to learning resources and ways to support community-led solutions. Learn more about us.
"The IRS is unforgiving on charitable contributions. If you don't have the right pieces of paper, you don't get the deductions," says Bill Fleming, a managing director with accounting firm PwC.
Cash gifts of less than $250. Keep a canceled check, credit-card receipt, bank record or acknowledgment from the charity showing the date and amount of the contribution.
Gifts of $250 or more. You'll need a written acknowledgment from the charity including the amount and date of your contribution. "And the receipt has to have the magic words on it -- 'no goods or services were received,' " says Fleming.
Noncash donations. A charity will provide a form acknowledging a gift of, say, clothes or furniture, but it's up to you to determine the value. You can deduct the fair market value of the items, which is what you would get for the items based on their age and condition if you sold them.
Gifts of items worth more than $5,000. You generally need an appraisal valuing items worth more than $5,000, in addition to an acknowledgment from the charity.
Charitable mileage and travel. You can generally deduct expenses for your travel while performing services for a charity, including 14 cents per mile driven as well as parking fees and tolls.
Out-of-pocket charitable expenses. You can deduct the cost of items you buy for a charity yourself. Keep receipts of those expenses and the date and reason for the purchase.
Qualified charitable distributions from an IRA. If you're older than 70½, you can give up to $100,000 each year tax-free from your traditional IRA to charity.
Gifts made through a donor-advised fund. Recordkeeping is easy if you have a donor-advised fund. "We love donor-advised funds because they're in the business to do this, and they know all the rules and give you good receipts," says Fleming.
Read the full article about charitable tax deductions by Kimberly Lankford at Kiplinger.