Do you remem?ber when you could esti?mate the amount of a cer?tain amount of giv?ing to a char?ity with?out hav?ing a lot of doc?u?men?ta?tion?? ?I esti?mate I?dropped $20 to the Sal?va?tion Army ket?tle, and?another $5 per?week to the church col?lec?tion, plus donated some clothes and other items val?ued at around $50??call it $330.????Those days are long?gone.
Cash Dona?tions: If you drop $20 cash in the bell ringers bucket, and they don?t?give you a?receipt, it is?NOT a deductible donation.
Any?more even mod?est cash dona?tions can?t be deducted unless you have a can?celed check, credit card charge, bank state?ment or writ?ten?receipt from the char?ity to sub?stan?ti?ate the deduction.
Fur?ther?more doc?u?ments prov?ing you made the char?i?ta?ble con?tri?bu?tion?have to be con?tem?po?ra?ne?ous, mean?ing they have to be cre?ated at or near the time of the dona?tion; acknowl?edge?ments from the char?ity have to be received before the ear?lier of the date you file your taxes or the due date of the tax return includ?ing exten?sions.? If you receive a required writ?ten acknowl?edge?ment dated after you file,?the deduc?tion?may be denied in?audit.
For dona?tions of cash, check or charge that are $250 or more you must have a writ?ten acknowl?edge?ment from the char?ity, or cer?tain pay?roll records, which indi?cate the date of the dona?tion and the amount.? Again the sub?stan?ti?a?tion (the proof that? you gave this money) must be con?tem?po?ra?ne?ous.? And it must be received before you do your?taxes.
Non-cash Dona?tions: The sit?u?a?tion is more com?pli?cated when you donate non cash?items.
If the value of non?cash dona?tions is under $250 a receipt of the dona?tion with the date, charity?s name & a rea?son?ably detailed?descrip?tion of the goods donated-you don?t have to get a receipt in the case it is incon?ve?nient to do so (such as a char?ity drop box).? The key here is rea?son?ably detailed descrip?tion; I advise peo?ple to take pic?tures of the donated goods?dig?i?tal cam?eras make it easy, why take a chance?? Some other records needed to value the dona?tion maybe required as?well.
If the value of the prop?erty exceeds $250 then the char?ity must sup?ply a writ?ten receipt, which also includes whether or not you received any ben?e?fit from donat?ing those goods and if so the Fair Mar?ket Value of that ben?e?fit, in addi?tion to the other doc?u?ments. Again this receipt needs to be dated and received before you file your?taxes.
If the value of the prop?erty exceeds $500 then you need even more infor?ma?tion about the prop?erty you donated
- How you got it, pur?chase, gift, bequest, inheritance
- The approx?i?mated date you got it, or if you cre?ated it, when it was sub?stan?tially completed
- Its?cost or other?basis
Finally if the prop?erty donated exceeds $5000 you will need a qual?i?fied appraisal of that property.
Two recent cases before the IRS affirm the need to keep ade?quate sub?stan?ti?a?tion?& get the writ?ten acknowl?edge?ment from the char?ity in a timely fashion.
Case 1: Ordi?nar?ily a tax?payer can deduct their out of pocket costs?incurred on behalf of a char?i?ta?ble orga?ni?za?tion. In this case a woman was doing just that, she paid vet bills, for food and other expenses of feral cats she fos?tered for?for a tax-exempt orga?ni?za?tion.? But she failed to get con?tem?po?ra?ne?ous acknowl?edge?ment of her large expenses from that orga?ni?za?tion.? The Tax Court ruled in favor of the IRS; she was not allowed to deduct those expenses even though she had other doc?u?men?ta?tion of them [Van Dusen, 136 TC No.?25].
Case 2:?A donor made a large dona?tion to a non-profit orga?ni?za?tion, but the orga?ni?za?tion did not give him a receipt. In a Pri?vate Let?ter Rul?ing, even if the orga?ni?za?tion now amends its Form 990 acknowl?edg?ing the gift that will not suf?fice to OK the donor?s deduction.
As you can see from the tax?payer stand?point, doc?u?men?ta?tion includ?ing timely writ?ten acknowl?edge?ment from the char?ity is required for even mod?est donations.?Charities should?always acknowl?edge?their?donors, and do so quickly, espe?cially if they give more than?$250.
As always, small busi?ness ser?vices and tax?a?tion are our busi?ness.? If you need help with this issue, or require other ser?vices,? Please give Art & Busi?ness Con?sult?ing a call.? We would love to engage you as a client.
The usual dis?claimers: Although ABC has made every effort to insure the accu?racy of Taxes, Tips and Tools, mis?in?for?ma?tion, dis?in?for?ma?tion, changes, mis?takes, typos and hack?ers hap?pen, there?fore Art & Busi?ness Con?sult?ing LLC takes no respon?si?bil?ity for any action taken or results based on the infor?ma?tion sup?plied here in. The con?tent of this blog gen?er?ally applies to busi?ness and indi?vid?ual tax?a?tion in the United States of Amer?ica.? Inter?nal Rev?enue Ser?vice Cir?cu?lar 230 Dis?clo?sure:? As pro?vided for in Trea?sury reg?u?la?tions, advice (if any) relat?ing to fed?eral taxes that is con?tained in this com?mu?ni?ca?tion (includ?ing attach?ments) is not intended or writ?ten to be used, and can?not be used for the pur?pose of (1) avoid?ing penal?ties under the Inter?nal Rev?enue Code or (2) pro?mot?ing, mar?ket?ing or rec?om?mend?ing to another party any plan or arrange?ment address herein.? Art & Busi?ness Con?sult?ing LLC cur?rently does not have a cer?ti?fied pub?lic accoun?tant, human resource spe?cial?ist, cer?ti?fied finan?cial plan?ner or an attor?ney on staff; this infor?ma?tion is purely for edu?ca?tional pur?poses and not to be con?strued as legal or finan?cial advice. Art & Busi?ness Con?sult?ing LLC and its employ?ees, mem?bers and asso?ciates are not engage to prac?tice law; you always should dis?cuss legal mat?ters with your attor?ney before talk?ing to any?one?else.
Tags: cash donations, charitable deduction, Charity, conteporaneous substantiation, donation of property, non-cash donations, requirements for deduction, substatiation of charitable contributions, what do I have to keep?, written acknowledgement
Source: http://artandbusinessconsulting.com/blog/2011/07/get-the-receipt-from-the-charity-in-writing-now/
rachel ray ryan sheckler glen campbell j.k. rowling j.k. rowling hewitt transit
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.