question.jpgIn Federal Income Tax

What types of records of my charitable donations should I keep?

When you include charitable donations on your itemized deductions, you must have written records to substantiate those claims. The exact type of record you need varies based on the amount of your donation. For detailed information, you can review IRS Publication 526, but it basically works like this:

For out-of-pocket expenses you incur while providing volunteer services, you should keep written records and receipts indicating the amount of the expenses. You should also try to obtain a written acknowledgment of these expenses from the qualified organization.

For contributions less than $75, you should retain a canceled check, receipt or written letter from the qualified organization. Alternatively, you can choose to keep your own regular and written records, including the name of the qualified organizations you contribute to, as well as the dates and amounts of such contributions.

For contributions that are over $75 but less than $250, you need the same written records discussed above. However, if you received any benefits from your contribution (for example, if you purchased something from a charity auction) you will also need a statement from the charity known as a disclosure statement. They are required to provide this disclosure statement when the charitable contribution is more than $75, and it will indicate an estimated value of the benefit you received as well as a statement of how much of the contribution you can deduct in your itemized deductions. Disclosure statements are not required, however, where you only receive a token item or where you give to a religious organization and the only benefit is an “intangible religious benefit” such as being permitted to enter religious ceremonies.

For contributions over $250, you need a written acknowledgment from the qualified organization, indicating the contribution you made - a canceled check or receipt is insufficient.

Finally, if you have donated property valued at more than $5,000, in addition to the things discussed above, you also need to obtain a written appraisal of the property, indicating its value.