Today TaxMama hears from Richard in Georgia who wants to know, “Is the deduction for charitable donations of $500 or less without receipts still allowed?”
Dear Richard,
Weeeell, it’s not exactly about taking deductions without receipts. And it’s not exactly $500.
There is a $500 limit for non-cash contributions – things you give away to organizations like the Salvation Army or Goodwill. But not for cash donations.
Sure, sometimes, it’s a pain to wait through slow lines to get a receipt. But if you choose to drop and run, be sure as heck to have a list of all the items you donated, the date of the donation, the name of the organization and the address where you dropped them off.
Personally, I would never show exactly $500 without receipts. It’s kind of a red flag.
For donations you made using money (checks, cash, etc.), you do need a receipt from the organization for each donation of $250.00 or more. Be sure you get those receipts, or you’re apt to lose the right to take the deduction.
As to the small donations – I wouldn’t go overboard with lots of little things if I had no checks or receipts. When you’re audited, the IRS examiner has discretion about insisting on getting some kind of proof for those smaller donations. There are still a few places where you can simply drop some cash or coins into a box. But, if you’re audited, can you name any ONE place where you dropped money into a box? Remember, handouts to panhandlers on the street don’t count as deductible contributions. So, be prepared with a written list of all the organizations to whom you gave cash donations – and (approximately) when. And where you made those donations.
Remember, if you got something for your donation, like a meal, tickets to a show, a t-shirt or something – you’ll need to deduct the value of the ‘gifts’ you received. And no – scrip you buy from your school-age child or neighbor’s child is not a donation. You’re getting the face value of the coupon in groceries or merchandise. Make donations via checks, credit cards or payroll withholding. You’re better off.
For more information, read IRS Publication 526 – Charitable Contributions https://www.irs.gov/publications/p526/index.html
And remember, you can find answers to questions about deducting contributions and all kinds of other tax issues, free. Where? Where else? At TaxMama.com
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- IRS Publication 526 :: Charitable Contributions
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