CPA & Business Advisory Blog

Three Requirements for a Charitable Donation

It feels so good to be able to give.   To pay it forward to an organization who can assist others in need.  Most of us take the time at the end of the year to take a look at the blessings that we have and make a decision to do something charitable.  It gives you a warm feeling inside to be able to give back.   So you write out that nice donation check and give it to the charity of your choice.   Sometime later you receive a note from the organization you chose thanking you for your donation.   Again you have that warm feeling that you made a difference and did something good!   You tuck that letter away to use at income tax time.

The IRS states that any donation over the amount of $250 must have written substantiation from the organization.   A cancelled check is not sufficient enough.  

  • First the letter must be received by the taxpayer prior to the date the return for the year of the donation is filed.
  • Second, then letter must include the date the donation was made and the amount of the donation.
  • Third, the letter must state that "no goods or services were provided" in exchange for the donation.

Without meeting those three qualifications, the IRS can deny your contribution and disallow the deduction on your tax return.

Don’t let the IRS take away that warm feeling that you received from making your donation by taking away your deduction.   Be sure to check that your charity is a qualified charity and you receive written substantiation of your donation.

Have a question on charitable contributions and your personal tax return?  Post a comment below or contact our Tax Planning and Preparation Group at 440-449-6800.

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