Did you donate to charity last year? Acknowledgment letters from the charities you donated to may have already shown up in your mailbox. But if you don’t receive a letter, can you still claim a deduction on your 2023 income tax return? It depends.
Here's What you Need to Know
To prove a charitable donation to claim as a tax deduction, you must comply with IRS substantiation requirements. For a donation of $250 or more, this includes obtaining a contemporaneous written acknowledgment from the charitable organization stating the amount of the donation, whether you received any goods or services for the donation and the value of any such goods or services.
“Contemporaneous” means:
The date you file your tax return, or
The extended due date of your return
Therefore, if you made a donation in 2023 but have yet to receive a substantiation from the charity, it’s not too late — as long as you haven’t filed your 2023 return. Contact the charity now and request a written acknowledgment.
Donations Valued Under $250
Keep in mind that, if you made a cash gift of under $250 with a check or credit card, generally a canceled check, bank statement or credit card statement will suffice. However, if you received something in return for the donation, you generally must reduce your deduction by its value — and the charity is required to provide you a written acknowledgment as described earlier.
To Itemize, or Not Itemize?
Currently, taxpayers who don’t itemize their deductions (and instead claim the standard deduction) can’t claim a charitable deduction. Under previous COVID-19 relief laws, an individual who didn’t itemize deductions could claim a limited federal income tax write-off for cash contributions to IRS-approved charities for the 2020 and 2021 tax years. Unfortunately, the deduction for nonitemizers isn’t available for 2022 or 2023 tax returns.
Non-Cash Donations
Some types of donations require additional substantiation. For example, if you donate property valued at more than $500, you must attach a completed Form 8283 (Noncash Charitable Contributions) to your return. For donated property with a value of more than $5,000, you must obtain a qualified appraisal and attach an appraisal summary to your tax return.
So, how should you claim your charity donation on your 2023 taxes? Make sure you have the proper documentation from the organization to submit along with your returns. Haven't received your letter from the organization you donated to yet? It's not too late to try to obtain it. Make sure you reach out to the organization to get receipt of your donation prior to filing your tax returns.
We look forward to assisting you this tax season! Schedule your appointment or begin uploading your tax documents to begin your process.