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Charity Donations and Taxes

August 11th

For many individuals who make large numbers of charitable donations, the number one issue can be losing their tax deduction. However, there is a simple solution: Get the letter.

For taxpayers who make charitable donations of $250 or more, the letter from the organization acknowledging the gift is the most necessary component when seeking a tax deduction. The letter must also include certain information, including that the gift occurred by a specific date, in order for the donation to qualify for a deduction. Claiming a deduction that does not qualify can lead to tax debt or audits

If you want to seek a tax deduction for your charitable donation, ensure that you have a letter from the organization that includes the following:

  • The amount of the gift (the donation must total $250 or more)
  • The date on which the gift was given
  • A statement that “no goods or services” were provided in connection for this gift

The taxpayer must also have the letter in hand at the time they wish to file their tax returns, although the letter may be sent by email. This means that if an individual’s tax returns are filed on March 15, but he does not receive the letter from the organization until April 9, he will not be able to have the deduction.

A Strict Approach

Be warned, the IRS has taken a very literal approach to the laws associated with these deductions. Though Congress has written some provisions in the tax code that would allow some flexibility in certain cases it is, at the end of the day, at the discretion of the IRS.

Since the Internal Revenue Service generally takes a very literal approach to these laws, applicants should be sure to make deadlines and not expect any leniency.


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