You Need Your Receipt!

By being obedient to the Christian call to give to the building of God’s kingdom, to assist the poor and to help those that cannot help themselves, we cannot escape being givers. Being a giver satisfies that internal mandate to assist while also honoring biblical scripture.

The Internal Revenue Service honors us when we give to charity and religious organizations by giving us a dollar for dollar tax deduction for every gift that we give. To get this tax deduction for our gifts, we must be aware and compliant to the IRS written acknowledgement guidelines for charitable deductions.

According to IRS Publication 1771, as a donor we cannot claim a tax deduction for any single contribution of $250 or more without a written acknowledgement of the gift from the receiving organization given in the same time period. An annual statement from the church or organization given within the same tax time period satisfies this request.

Over the years I’ve had cases in which I’ve given a gift of $250 or more to a church that I’ve visited but I did not get a written acknowledgement of it.

As the tax payer, it is my responsibility to ensure that I have the the proper receipts before I include any deduction on my tax return. Non-profit organizations are responsible for issuing receipts and acknowledgement but there is no penalty assigned to an organization that does not provide required document to their donors. It is important that you personally track your giving and request any missing written acknowledgements before you file your tax return. Over the years I’ve found that many larger churches have this process automated where understandably, small churches do not. I’ve followed-up with smaller churches to request the required paperwork to claim the gift as a tax deduction. There’s never a problem in getting the receipts, it’s just an added step that I must take.

There are no IRS forms for churches and charities to use in providing donor written acknowledgements. A letter written by a leader in the organization on their letterhead is sufficient. It also is not necessary to have the donor’s social security number or tax ID number on the receipt. For more information on when your social security number is required and when it is not, read Protecting Your SSN.

When you get your receipt from the church or charity, in addition to being addressed to you, ensure that it includes the following 6 elements:

1. The name of the organization.
2. The amount of the cash contribution.
3. A description (but not the value) of a non-cash contribution.
4. A statement that no goods or services were provided by the organization in return for the contribution, if that was the case.
5. A description and good faith estimate of the value of goods or services, if any, that an organization provided in return for the contribution.
6. A statement that goods or services, if any, that an organization provided in return for the contribution consisted entirely of intangible religious benefits, if that was the case.

Charitable contributions are the only thing that gives us a dollar deduction against our tax bill for every dollar that we give. Don’t miss out on any charitable contribution deductions when you file your IRS tax return!

For additional information on charitable contributions substantiation and disclosure requirements see the IRS publication 1771.

Carolyn