Tax Laws on Church Donations

by Michael Keenan ; Updated July 27, 2017
Tax Laws on Church Donations.

The Internal Revenue Services (IRS), allows taxpayers who itemize their deductions to write off their donations to charitable organizations. Most churches meet this requirement (see resources for the IRS's database to check your church). To prevent people from abusing this deduction, the IRS has specific rules about the timing of donations, the documentation required and the amounts you can deduct.

Timing

The IRS rules only allow you to claim a deduction for the year that you actually donated the money. When you pledged to give the amount and the amount you pledged to donate are ignored. If you make a cash or property donation, the money must be in the hands of the charity by Dec. 31 of the tax year you wish to claim the deduction. For example, if you pledge $600 to your church on August but by December 31st you have only given $300 to the church, your deduction is limited to $300. If you give another $400 on Jan. 1, you must take that deduction the following year. If you donate with a check or a credit card, you must take the donation in the year you give to the charity, which may not be the same as when the check clears your account or the donation posts to your credit card bill. Even putting a check in the mail counts as making a payment. For example, if you write a check and mail it to your church on Dec. 30, even if the church does not receive it until Jan. 4 and the check does not post to your account until Jan. 6, you can claim it for the prior tax year.

Amounts

If you are making a cash or cash-like donation, your deduction value is equal to the amount donated minus any tangible gifts you receive in return. For example, if you donated $500 to the church and in return got to attend a special dinner valued at $50, your deduction would be limited to $450. Intangible religious benefits do not decrease the tax value of your donation.

Documentation

The IRS requires that you be able to support your donations in the event that your tax return is audited. For donations of less than $250, you can use a canceled check or bank statement to prove your deduction. If your donation is larger, the church must provide you a receipt documenting your donation. For property donations, the church must estimate the fair market value of the goods you have contributed. If any items are valued at over $5,000, they must be professionally appraised. Your donations are recorded on Schedule A. If you donated items, you must fill out section A of Form 8283. If any items are valued at over $5,000, you must also fill out section B.

About the Author

Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."

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