Taxpayers Guide to LLCs and S Corps
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Do I need receipts for my donations?
Yes. Period. Okay, there is one tiny exception.
Noncash Donations: There are four areas to discuss when it comes to noncash contributions.
- Less than $250
- Between $250 and $500
- Between $500 and $5,000
- Over $5,000
Less Than $250: Receipts or written statements are required unless impractical to do so (you leave property at an unattended drop-off site). There’s your tiny exception.
Between $250 and $500: You must obtain a written acknowledgement showing the description of the donation (not necessarily the value), and whether goods or services were received for the donation. Each donation over $250 must have a separate acknowledgement.
Between $500 and $5,000: Same rule as above, but the acknowledgement must also state how you obtained the property, along with the date and approximate value. If you purchased several items over several different dates, and donate them at once, the IRS generally accepts ‘various’ on tax forms.
Over $5,000: Same rules as above, plus you typically need a written appraisal from a qualified appraiser. This applies to a single item, or a group of similar items.
Cash Donations: There are a ton of rules and misconceptions, so here we go.
You cannot deduct a cash contribution, regardless of the amount, unless you have-
- A financial record showing the name of the organization, date and amount, or
- A receipt or written statement from the organization.
The financial record can include a canceled check, bank statement and credit card statement showing the organization, date and amount. For payroll deductions, a paystub or a W-2 showing the amount is sufficient. And for cell phone or text donations, the IRS is allowing copies of your phone records or statements if it shows the organization, date and amount.
Myth Buster: The days of saying you donate $20 a week to church, and therefore you want to deduct $1,040 are long gone. Since 2007, you must have a receipt for every dollar you donate. Sure you can deduct any amount, but your audit will disallow the deduction without evidence. See Does deducting charitable contributions cause an audit? below.
An organization is required by law to give you a written statement for any single donation over $75. Read that again. The organization is required. Please do not confuse this as donations under $75 do not require the taxpayer to keep receipts.