Substantiating Charitable Contribution by Individual
If the contribution is $250 or more, you will need a written receipt from the charity or you will not be able to claim the deduction. If you make separate contributions of less than $250, you will not be subject to the written receipt requirement, even if your contributions to the same charity total $250 or more in a year. NOTE: In normal years, if you take the standard deduction, you cannot take a deduction for any charitable donations. However, for tax year 2021, you can take up to an additional $300 in deductions for CASH charitable donations on top of the standard deduction if you are filing as single. For married filing jointly, the maximum is $600.
For donated property with a value of more than $5,000, you are generally required to obtain a qualified appraisal and to attach an appraisal summary to the tax return. For gift of art valued at $20,000 or more, you must attach a complete copy of the signed appraisal (rather than appraisal summary) to your tax return. IRS may also request that you provide a photograph.
Recordkeeping for contributions for which you receive goods or services: Your deduction is limited to the excess of what you gave over the value of what you received. For example, if you gave $100 and in return received a dinner worth $40, you can deduct $60. However, certain membership benefits can be disregarded if the annual membership fees or dues are $75 or less. Those benefits include free or discounted parking, preferred access to goods or services, and NO more than $11.20 admission to membership only event.
Donating a used car to charity
Since most charities do sell the cars they receive, it is likely that your donation will be limited to the actual sale price. You will not know the amount of your deduction until the charity has sold the car and reported the sale proceeds to you. If the charity uses the car in its operations or materially improves the car before selling it, your deduction will be based on the fair market value at the time of the donation.
If the charity sells the car, the charity should provide you with the acknowledgement within 30 days of the sale. If the charity will use or (materially improve) the car, the acknowledgement needs to certify the intended use and intended duration of the use and should be provided within 30 days of the donation.
Donating appreciated stock to charity
Where the donated property is “gain” property, the donor does not have to recognize the gain on the donated property. This rule allows for the “doubling up” of tax benefits: a charitable deduction, plus avoiding tax on the appreciation in value of the donated property. For example, Amy owns $10,000 worth of stock in ABC, Inc. which she bought for just $2,000 several years ago. She donates the stock directly to the school. She gets the $10,000 charitable deduction and avoids any tax on the capital gain.
Doing volunteer work for charity
Although you cannot deduct the value of services you perform for a charitable organization, some deductions are permitted for out-of-pocket costs you incur while performing the services. This includes away-from-home travel expenses, cost of entertaining (wining and dining) others on behalf of a charity, actual unreimbursed expenses or a flat 14 cents per mile for charitable use of car, and cost of uniforms. Furthermore, you can safeguard your deduction as follows:
For donated property with a value of more than $5,000, you are generally required to obtain a qualified appraisal and to attach an appraisal summary to the tax return. For gift of art valued at $20,000 or more, you must attach a complete copy of the signed appraisal (rather than appraisal summary) to your tax return. IRS may also request that you provide a photograph.
Recordkeeping for contributions for which you receive goods or services: Your deduction is limited to the excess of what you gave over the value of what you received. For example, if you gave $100 and in return received a dinner worth $40, you can deduct $60. However, certain membership benefits can be disregarded if the annual membership fees or dues are $75 or less. Those benefits include free or discounted parking, preferred access to goods or services, and NO more than $11.20 admission to membership only event.
Donating a used car to charity
Since most charities do sell the cars they receive, it is likely that your donation will be limited to the actual sale price. You will not know the amount of your deduction until the charity has sold the car and reported the sale proceeds to you. If the charity uses the car in its operations or materially improves the car before selling it, your deduction will be based on the fair market value at the time of the donation.
If the charity sells the car, the charity should provide you with the acknowledgement within 30 days of the sale. If the charity will use or (materially improve) the car, the acknowledgement needs to certify the intended use and intended duration of the use and should be provided within 30 days of the donation.
Donating appreciated stock to charity
Where the donated property is “gain” property, the donor does not have to recognize the gain on the donated property. This rule allows for the “doubling up” of tax benefits: a charitable deduction, plus avoiding tax on the appreciation in value of the donated property. For example, Amy owns $10,000 worth of stock in ABC, Inc. which she bought for just $2,000 several years ago. She donates the stock directly to the school. She gets the $10,000 charitable deduction and avoids any tax on the capital gain.
Doing volunteer work for charity
Although you cannot deduct the value of services you perform for a charitable organization, some deductions are permitted for out-of-pocket costs you incur while performing the services. This includes away-from-home travel expenses, cost of entertaining (wining and dining) others on behalf of a charity, actual unreimbursed expenses or a flat 14 cents per mile for charitable use of car, and cost of uniforms. Furthermore, you can safeguard your deduction as follows:
- Get written documentation from the charity which indicates the nature of your volunteering activity and the reason for related expenses to be paid.
- Maintain detailed records of your out-of-pocket expenses—receipts plus a written record of the time, place, amount, and charitable purpose of the expense.
- Submit a statement of expenses and, preferably, a copy of the receipts, to the charity, and arrange for the charity to acknowledge in writing the amount of the contribution