What Records You Need to Keep
For cash contributions under $250, be sure to keep the following records:- Canceled check, bank statement, or credit card statement showing the amount paid, date paid, and the name of the charity to which you gave money;
- Written receipts or acknowledgment letters from the charity showing the date and the amount of your contribution; and
- Any other documentation or records that would establish the date and the amount you contributed.
- Amount of cash you donated,
- Whether the charity provided any goods or services in exchange for your donation, and
- Description and good faith estimate of the value of goods or services that the charity provided to you.
Keeping Records of Non-Cash Contributions
For donations of property, you must keep records to establish what you donated, its condition, its fair market value, and the amount of your tax deduction. Your records must indicate:- Name and address of the charity,
- Date and location of the contribution,
- Description of the property donated,
- Fair market value of the property and how you figured the value, and
- Amount claimed as a tax deduction.
For non-cash contributions worth $250 to $500, you will also need a written acknowledgment letter from the charity to substantiate your deduction.
For non-cash contributions worth $500 to $5,000, you will need to keep records that establish:
- How you acquired the property (such as purchase or inheritance)
- Date you acquired the property
- Your cost or adjusted basis in the property
The new law also toughens the rules for non-cash donations. Donated items, such as cars, clothing, and household goods, must be in good condition. "The new law does not define 'good condition,'" according to a briefing of the law from CCH. No tax deduction is allowed for items in less than good condition. You should keep a detailed list of the non-cash goods you donated to charity, along with a description of their condition.
Will the IRS be auditing tax returns that claim a deduction for charitable contributions? No one knows for sure, but tax journalist Kay Bell provides this word of warning, "Perhaps the IRS will, at least for a while in this new requirement's initial stages, start pulling more returns that list donated property and asking filers to confirm the worth of their gifts."
