How to Keep Proper Records for Donations

by Contributor ; Updated July 27, 2017
Keep Proper Records for Donations

Items you will need

  • IRS Forms
  • Cancelled Checks
  • Ledger Books
  • Calculators
  • File Cabinets
  • File Folders
  • Tax Preparation Software
  • Ledger books

How to Keep Proper Records for Donations. No one likes digging through a desk or shoebox at tax time, searching for that one receipt showing a donation made to charity. Simplify your paperwork when filing your taxes by learning beforehand what the Internal Revenue Service requires you to keep as a record of your charitable contributions. Here are tips from the IRS website.

Cash Donations (including contributions paid by cash, check, credit card or payroll deduction)

Step 1

Determine whether the contribution is more than $250. When calculating this, do not combine separate contributions (for example, if you gave $100 a month, count each donation as $100, not a total of $1,200).

Step 2

For cash contributions of less than $250, keep one of the following: a) a canceled check or a legible account statement that includes a check number, amount, date posted and to whom paid (if payment was by check); amount, date posted and to whom paid (if payment was by electronic fund transfer); or amount, transaction date and to whom paid (if payment was charged to credit card); b) a receipt from the charitable organization showing the name of the organization, the date of the contribution, and the amount of the contribution; c) other reliable written records that include the information described in (b).

Step 3

For cash contributions of more than $250, you need an acknowledgment of your contribution from the qualified organization. The acknowledgment must: a) be written; b) include the amount of cash contributed, whether you received any goods or services in exchange for the donation, a description and good faith estimate of the value of any goods or services; c) be received on or before the date you file your return for the year that you made the contribution or by the due date, including extensions, for filing the return, whichever is earlier.

Step 4

For payroll deductions of more than $250 from a single paycheck, you must keep a) a pay stub, W-2 form or other document from your employer that proves the amount withheld; b) a pledge card or other document from the organization that states that it does not provide goods or services in return for any contribution made to it via payroll deduction.

Noncash Donations

Step 1

Get a receipt that shows the following if the donation value is less than $250: a) the name of the charitable organization; b) the date and location of the contribution; c) a reasonably detailed description of the property.

Step 2

Get an acknowledgment of your contribution that includes the three items listed above if the value of the donation is more than $250 but less than $500. The acknowledgment must also be written and include a description (but not necessarily the value) of any property you contributed. The acknowledgement should also include whether you received any goods or services in exchange for the donation and a good faith estimate of the value of any goods or services. It also must be received on or before the date you file your return for the year that you made the contribution or by the due date, including extensions, for filing the return, whichever is earlier.

Step 3

Include the following in your records if the donation is valued at more than $500 but less than $5,000: a) how you got the property; b) approximate date you got the property; c) the cost or other basis of property held less than 12 months (except for publicly traded securities).

Step 4

Obtain a qualified written appraisal of the donated property from a qualified appraiser if the donation is valued at more than $5,000. When figuring whether your deduction is over $5,000, combine your claimed deductions for all similar items donated to any charitable organization during the year.

Tips

  • You are not required to get a receipt for noncash items valued at less than $250 when it is impractical to get one (for example, at a charity's unattended drop site).

Warnings

  • This is only a summarized list of general requirements. Consult IRS Publication 526, "Charitable Contributions," or a tax adviser for full details and specific exceptions.