Do you make donations to charity during the year? If so, it might be beneficial to claim these donations as a tax deduction. Whether you write a check or donate your used personal items, you’ll want a system to keep track of your donations.
Please note: This information is not intended to serve as tax advice. It is just one method to track your donations. Please see your tax advisor or CPA for tax guidance.
Cash or Check Donations
Taking a deduction requires some record-keeping. Don’t shy away because it takes work. Just be sure to follow the rules for documentation.
Proof: According to the IRS Pub 526, you must keep one of the following:
1. Bank Record showing the name of the organization, date and amount of contribution. A bank record can be:
a. A Canceled Check
b. Bank Statement or
c. Credit card
2. Receipt or letter from the organization
3. Payroll deduction records
Receipt: In addition, if your donation is more than $250, obtain a receipt from the organization.
It’s helpful if you track your donations throughout the year, instead of trying to compile all of the information at tax time. You can use the Donation Tracker below to organize your cash or check donations:
Did you do some spring cleaning recently? If you donated these items to a qualified charitable organization, you could be entitled to a deduction. Once again, record-keeping is essential, but not impossible. Not sure how to keep track of your donation? You’re not alone. There are a lot of rules and procedures. For our purposes, we will focus on tracking clothing and household donations. You know the ones: clothes your kids outgrew, the jeans that don’t fit you anymore, your husband’s size medium shirts. These items decreased in value since you bought them. We are also assuming each item is worth less than $250.
Here are some of the guidelines (from the IRS Pub 526) for non-cash donations:
- The clothing or household items must be in good used condition or better
- Household items include:
- Furniture and furnishings
- Linens and
- Other similar items
The IRS also points out that “household items do not include: food, paintings, antiques, and other objects of art, jewelry and gems, and collections.”
Recordkeeping: If you make any non-cash contribution, you must get and keep a receipt from the charitable organization. However, you are not required to have a receipt where it is impractical to get one (for example, if you leave property at a charity’s unattended drop site).
Additional records: You must also keep reliable written records for each item of contributed property. Your written records must include the following information:
- name and address of the organization to which you contributed
- date and location of the contribution
- description of the property in detail reasonable under the circumstances
- fair market value of the property
So let’s get to work. You can use this chart to track donations of clothing and personal items:
After listing the items on the Donation Tracker, you’ll need to determine a value. The IRS suggests, “You should claim as the value the price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops.” So how do you know what someone will pay for your old jeans or your husband’s shirts? You can use a valuation guide:
Need more details? Check out the following items:
- IRS Pub 526 – Charitable Contributions
- If you made non-cash contributions, you may be required to fill out parts of IRS Form 8283.
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