What Is a Tax Receipt for Donations?

A tax receipt for donations is a document used to claim deductions for charitable contributions on federal income tax returns. It acknowledges a gift made to a qualified organization, providing proof for tax purposes.

What a Tax Receipt Is

A tax receipt, formally known as a contemporaneous written acknowledgment, is a document issued by a qualified charitable organization to a donor. Without this acknowledgment, donors generally cannot claim a tax deduction for contributions of $250 or more.

Qualified charitable organizations are responsible for providing these receipts. They verify that a donation was received and provide specific information about the contribution. The term “contemporaneous” means the donor must receive the acknowledgment by the earlier of the date they file their tax return for the contribution year or the due date (including extensions) of that return.

Key Information for a Valid Receipt

For a tax receipt to be considered valid by the IRS, it must contain specific information. These requirements are detailed in IRS publications, such as Publication 1771 and Publication 526.

A valid receipt must include the name of the charitable organization, the date the contribution was made, and the amount of any cash contribution. For non-cash contributions, the receipt needs to provide a description of the donated property, but not its value. The donor is responsible for determining the fair market value of donated property.

The receipt must state whether the organization provided any goods or services in return for the contribution. If goods or services were provided, the receipt must include a good-faith estimate of their value. In cases where the only benefit received was an intangible religious benefit, the receipt should include a statement to that effect.

Receipt Requirements for Different Contributions

The specific receipt requirements can vary significantly based on the type and amount of the contribution.

For cash contributions under $250, a bank record, such as a canceled check or bank statement, or a written communication from the charity showing the name of the charity, date, and amount, is generally sufficient. However, for cash contributions of $250 or more, a contemporaneous written acknowledgment from the charitable organization is required. This acknowledgment must confirm the contribution and state whether any goods or services were provided in return.

Non-cash contributions, or donations of property, have additional requirements depending on their value. For property contributions with a total deduction of over $500, donors must file Form 8283, “Noncash Charitable Contributions,” with their tax return.

If a non-cash contribution is valued at over $5,000, a qualified appraisal of the property is generally required. Section B of Form 8283 must be completed, and in some cases, the appraisal itself must be attached to the tax return. Quid pro quo contributions, where a donor receives something of value in return for their donation, have specific disclosure rules for the charity. If the payment exceeds $75, the organization must provide a written statement estimating the value of the goods or services received by the donor, and the deductible amount is limited to the excess of the contribution over the value of those goods or services.

Maintaining Donation Records

Maintaining accurate and accessible donation records is a necessity for taxpayers. These records are essential for substantiating charitable contribution deductions in case of an IRS audit or inquiry. Proper recordkeeping ensures that all necessary documentation is readily available.

Generally, taxpayers should keep records supporting their tax returns for at least three years from the date they file the original return or two years from the date they paid the tax, whichever is later. However, it is often advisable to retain records for longer periods, such as six years, especially if there are complex financial situations or significant deductions. For certain types of financial documentation, some sources recommend keeping records permanently.

Acceptable forms of recordkeeping include physical copies of receipts and acknowledgments, as well as digital scans or electronic files. For smaller cash donations, bank statements, canceled checks, or credit card statements showing the charity’s name, date, and amount can serve as sufficient proof. Records of payroll deductions, such as pay stubs or W-2 forms showing the amount withheld for charity, along with a pledge card from the organization, can also be used as substantiation.