As a CPA working with nonprofits for just over 30 years, I’ve often been asked about the proper documentation and processes to claim your charitable giving when filing taxes. To help you get ready for tax season as the year draws to a close, here are the top things to keep in mind: 1. Before anything else, check to make sure an organization is qualified. You can always ask any organization whether it is a qualified organization, and most will be able to tell you. You can also go to IRS.gov and search for qualified organizations, or call the IRS at 1-877-829-5500. 2. You’ll need documentation that you gave to a nonprofit. For gifts of more than $250, that must directly come from the organization. Donors cannot claim a tax deduction without a record of the gift [PDF]. This could be a bank record (like a cancelled check) or a written communication from the organization (such as a receipt or letter). These have to show the name of the organization, the date of the gift and the amount. For a gift of more than $250, you MUST obtain a “contemporaneous, written acknowledgement of the contribution” from the organization. Keep in mind: the organization doesn’t incur a penalty for not sending you a notification, so the burden is on you as the donor to get this acknowledgement. Despite that, many organizations assist donors by providing a timely, written statement. How does this all work for payroll deductions? You can use a pledge card prepared by […]
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