Are Donations Postmarked by End of Year Tax Deductible?

The end of the calendar year often brings a surge in charitable giving. To ensure your generosity translates into a deduction for the current tax year, you must understand the specific timing rules. The method you use to donate—whether by check, credit card, or property—directly impacts the date your contribution is recognized for tax purposes.

Timing Rules for Cash Donations

The date a cash or cash-equivalent donation is considered made depends on the delivery method. For contributions by check, the “mailbox rule” states that a donation is counted for the year in which it is mailed, not when the charity receives or cashes the check. A check mailed via the U.S. Postal Service and postmarked by December 31st is deductible for that year. This rule does not apply to private delivery services like FedEx or UPS, where donations are dated on the day they arrive at the charity’s office.

When you donate using a credit card, the contribution is considered made on the date the charge is processed, not when you pay your credit card bill. A donation charged to your card on December 31st will count for that tax year, even if the credit card statement detailing the charge arrives in January.

For electronic fund transfers (EFTs) and other online payment systems, the donation date is when the funds are debited from your account. Because these transfers can take a few business days to process, you should initiate them several days before the end of the year to ensure the transaction is completed by December 31st.

Guidelines for Non-Cash Contributions

The timing for non-cash contributions is based on when you relinquish control of the asset. For donations of publicly traded stock, the contribution date is the day ownership is officially transferred to the charity. When done electronically, the gift is complete on the date the shares are received in the charity’s brokerage account. This process can take several days, so it is important to start the transfer well before the end of the year to ensure it settles by December 31st.

When donating physical property like clothing or vehicles, the donation is considered made on the date you physically deliver or mail the item to the organization. If you mail a package of donated goods, the postmark date will serve as the contribution date. If you drop the items off in person, the date of delivery is the contribution date.

A donation of real property is complete on the date that a properly executed and signed deed is delivered to the charitable organization. The complexity of these transactions means that planning well in advance of the year’s end is necessary to complete the process.

Substantiating Your Donation

Properly timing your donation is only the first step; you must also have the correct documentation to support your deduction. For any single cash or non-cash donation under $250, a bank record, such as a canceled check or credit card statement, is sufficient proof. This record should clearly show the charity’s name, the date, and the amount of the contribution.

For any single contribution of $250 or more, you must obtain a “contemporaneous written acknowledgment” from the charity. This formal receipt must contain the name of the organization, the date of the contribution, and the amount of cash given. If you donated property, the receipt must include a description of the item. The acknowledgment must also state whether the organization provided any goods or services in exchange for the gift and provide a good-faith estimate of their value.

Stricter rules apply to significant non-cash donations. If your deduction for all non-cash contributions exceeds $500 for the year, you are required to file Form 8283, Noncash Charitable Contributions, with your tax return. For donated property valued at over $5,000, you must also obtain a qualified appraisal of the item and have the appraiser and the charity sign Form 8283.