As we get closer to the 2009 individual income tax deadline (only 35 more days until April 14th!), and further into 2010, more and more clients are asking about what sort of record they need to keep for non-cash charitable contributions. Since the recordkeeping requirements change depending on how much the contribution is worth, check out the bullets below to find out what you need to do, no matter how much you donated last year (or plan to donate this year):
- For deductions of less than $250 to a single organization, you must get and keep a receipt from the charity that reflects the name of the organization, date and location of contribution, and a reasonable detailed description of the property (itemize the donation, basically). If you use one of the unattended drop sites and it is not practical to get the actual receipt, you must keep reliable written records for each item of donated property.
- For deductions of at least $250 but not more than $500, you must get and keep an acknowledgement of your contribution from the qualified organization. The acknowledgement must: (a) be written; (b) include a description of the contributed items, and whether or not the organization gave you any goods or services as a result of your donation; and, finally, (c) be received by you on or before the earlier of the date you file your return for the year you make the contribution or the due date for filing the return.
- For deductions over $500 but not over $5,000 you must have the same info in the previous bullet point plus the following: how you got the property, the approximate date you got the property, and the cost or other basis of the property.
- For deductions over $5,000 (for one item or a group of similar property items), you must have all of the records listed in the preceding two bullets as well as obtain a written appraisal of the donated property from a qualified appraiser.
As you can see, the accounting for charitable contributions has become quite complicated. Basically, it is most important that you have proper documentation to substantiate your deductions. If this is for your business and you are disposing of items that are currently on your fixed asset list, and being depreciated, it is important to make sure and identify those so that they can be properly disposed of on your business accounting records.
If you have further questions, of course, please let us know.
By Cathy Jenkins
by Jami Taylor
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