client service opportunities

gifts to charity: 6 facts about written acknowledgments

and of course, make sure the deduction is qualified.

by barry j. friedman, cpa
industrynewsletters

if your clients offer gifts or money to qualified organizations eligible to receive tax-deductible charitable contributions, they must do two things:

more: the latest fraud problem: synthetic identities | why padding tax deductions is a risky proposition | portability: sharing the estate tax exemption | tariffs: what clients need to know now | basis: turning a common client question into new business | the w-4 time-bomb and what to do about it
goprocpa.comexclusively for pro members. log in here or 2022世界杯足球排名 today.

  1. have a bank record or written communication from the charity for any monetary contributions.
  2. get a written acknowledgment from the charity for any single donation of $250 or more.


here are six things you should remember about donations and written acknowledgments:

  • if your client makes single donations of $250 or more to a charity, she must have one of the following: 1) a separate acknowledgment from the organization for each donation of $250 or more or 2) a single acknowledgment from the charity listing the amount and date of each contribution of $250 or more.
  • the $250 threshold doesn’t mean you add up separate contributions of less than $250 throughout the year. for example, if your client gave a $25 offering to his church each week, you don’t need an acknowledgment from the church, even though his total contributions for the year are more than $250.
  • contributions made by payroll deduction are treated as separate contributions for each pay period.
  • if your client makes a payment that’s partly for goods and services, her deductible contribution is the amount of the payment that exceeds the value of the goods and services.
  • your client must get the acknowledgment for his donation on or before the earlier of these two dates: the date you file his return for the year he makes the contribution, or the due date, including extensions, for filing the return.
  • if the acknowledgment doesn’t show the date of the contribution, you also must have a bank record or receipt or receipt that shows the date.

of course, you also have to make sure the organization your client is donating to is qualified. not every nonprofit can grant the right to an income tax deduction. clients can donate to civic leagues, social and sports clubs, labor unions and chambers of commerce, but they can’t deduct gifts to these organizations as a charitable expense. the same goes for donations to candidates for public office.