Donations and Taxes

Donations are a great way to save money on taxes. Donations help with others; clear out your old stuff; and provide a great tax deduction. It is important to keep the right type of donation records for your taxes.

Cash Donations are ones made with cash, check, payroll deductions and credit cards.

Record cash donations as they occur. Do not do a cumulative total for cash donations. If a $10 donation is taken out of your paycheck monthly for a charitable organization, the record would be for each, individual payroll deduction instead of $120 for the entire year.

Determine if the cash deduction is $250 or more.

Cash donations of less then $250 keep the following records:

1. Cancelled check
2. Receipt from the organization with date, amount and name of the organization
3. Legible account statement (if no cancelled check available) that has the check number; date posted; to whom paid and the amount paid
4. Electronic transfers keep legible account statement of date posted; amount posted; and to whom the amount was paid
5. Credit card transfers keep legible account statement of amount paid, date paid and to whom paid.

Cash donations of more then $250 keep the following records:

1. Written acknowledgement of the organization the donation was made to

2. Statement if any goods or services were received in return for the donation

3. Written statement of the description of the goods or services donated

4. Donation must be received by the organization on or before the date that the taxes are filed including extensions

Payroll deductions donations of more then $250 a payroll period keep the following records:

1. W-2 form with the amount of the deduction withheld by the employer

2. Pledge card or written statement from the organization that shows that the charity does not provide goods or services in exchange for the payroll deduction donation

Property or item donations of less then $250 keep the following records:

1. Name of the charitable organization

2. Date of the donation

3. Description of the items donated

4. Receipt if the donation is not a charitable drop-off location

Property or item donations of $250 to $500 keep the following records: