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If you give cash or checks, the value of the gift is easy to determine. If the value is less than $250, you must keep a cancelled check or credit card slip, a receipt, or some other reliable written record or evidence.
If the cash gift was $250 or more, your own records won't be enough. You must get a written acknowledgement of the gift from the organization which states the amount of the gift, and the amount of goods or services you received in return (if any). For gifts made in 2007, you must get this acknowledgment before you file your tax return for 2007, or the due date of the return, including extensions, whichever is earlier.
If you made more than one small donation (under $250) to the same group, but the total for the year was more than $250, don't worry about getting a statement from the organization. Each gift is counted separately, unless you wrote two checks on the same day to the same organization.
If you made gifts through payroll deductions (such as to the United Way), you don't need an acknowledgement letter unless any single deduction exceeded $250. In that case, save a copy of your pay stub and also a pledge card stating that the organization does not provide goods or services in exchange for payroll contributions.
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Did You Know?
Under the Pension Protection Act of 2006 and effective for contributions made in tax years beginning after August 17, 2006, donors of charitable contributions of cash, checks or other monetary gifts must retain certain records of the gift, regardless of the amount. Specifically, the donor must maintain either:
- a bank record; or
- a receipt, letter, or other written communication from the donee indicating the name of the donee organization, the date the contribution was made, and the amount of the contribution.
If these records are not kept for each donation made, then no deduction is allowed for the charitable contribution. This provision more closely aligns the substantiation rules for cash contributions with the substantiation rules for contributing noncash property to charitable organizations.
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Some additional rules apply to noncash gifts to charities, including additional documentation rules.
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