Donating household items that you no longer need or want is a great way to pass along items to those who need them and get a tax credit at the same time. However, many people do not have the proper documentation required by the IRS for their donations. Here are the items that should be on every charitable donation receipt, the language required and other important information.
Donation Dollar Amounts
The IRS requires a receipt for any single donation that exceeds $ 275. It is your responsibility to obtain the receipt so if the charity does not initially offer one, ask them for it. If a donor fails to obtain a receipt and later gets audited by the IRS, the donation amount will be added back into the amount of back taxes owed.
Types of Donations that Require Receipts
Many people know that they must obtain a donation receipt for used items that they donate, but the IRS requirements apply for other donated items as well. You must have a receipt for property, cash, services, and even benefits or privileges that you give to a charity free of charge.
If you donate a motor vehicle, boat or a plane to charity, the IRS also requires a donation receipt. However, instead of an informal letter or printed receipt, the charity must present the donor with a completed IRS charitable donation form 1098-C. This is required for all vehicle donations that exceed $500 dollars in value. In addition, the charity has 30 days from the day that vehicle donations are made to mail you a completed 1098- C form.
Required Receipt Information
A donation receipt can take the form of a formal receipt or it can be as simple as a written or typed letter. However, no matter the form it takes, there is certain information it must contain for the IRS to consider it official.
- Charity Name- The first item that must be written on the receipt is the official full name of the charity. The official name of the charity is the one that is on file with the IRS, so make sure this is the one that is placed on the receipt.
- Date of the Donation – The receipt must also have the full date including the year in which the donation was made.
- Donation Items- The receipt must clearly state what items were donated and the number of items (in the case of clothing, for example). .
- Amount of Contribution – The final required item is the amount of the donation. This may be a single number if only one item is donated, or it may be a sum total of multiple items donated such as a bags of clothes. Each item donated does not have to have a value beside it, but there must be a value for the total donation.
While donating unused items to a worthwhile charity is a great way to reduce your taxable income, make sure to get the proper charitable donation form with language that adheres to the IRS regulations.
Image Credit: Wikimedia Commons/United States Department of the Treasury