Additional information on last week’s post on documentation needed for charitable deductions

 

 

Cathy Robinson

Principal

robinson@hwco.com

 

Last week, I covered documentation you will need to report charitable deductions you have taken during the year. This week, consider additional, accompanying documentation which if you receive it, you will need to hold on to it for completion of your income tax return.

 

If you are working, you will receive your Form W-2 from your employer by January 31^st.  If you have a bank account, you may have received interest income during the year. If this is the case, you will receive a Form 1099-INT.   Furthermore, if you have a brokerage account or a mutual fund, you may have interest income, dividend income, or stock sales to report.  In this case, you should receive a consolidated Form 1099 and year end summary.  Another form you may receive is a 1099-G.  This form reports the amount of any tax refund you may have received in the prior year. 

 

If you were an independent contractor, you should receive a 1099 – MISC by January 31^st.  Additionally, did you take a withdrawal from a retirement account in 2015; did you roll over money to another retirement account?  If either of these scenarios happened, you will receive a Form 1099-R.  Lastly, were you a winner at the casino or the lottery?  If so, you will receive a W-2G.

 

Be alert and on the lookout for these forms in your mailbox soon!

 

What Documentation Do I Need for a Charitable Contribution Deduction?

 

Cathy Robinson, CPA

Senior Manager

robinson@hwco.com

You have made your charitable contributions during the year, now it is time to gather them for your tax return preparation.  What documents do you need to retain?

The IRS requires the donor maintain either a bank record or a receipt from the donee with the donee’s name, contribution date and amount for a cash donation.

 

For a payroll donation, the donor should retain the pay stub or documentation for the amount withheld with payment to the charitable organization. 

For a noncash donation of less than $250, the donor should maintain a receipt from the donee with the name, date, and a description of the items donated.  The donee will not provide a value of the donated property.

For contributions of $250 or more, the donor should maintain the written acknowledgment from the donee.  The following items should be included in the acknowledgment:  amount of cash or property description and a value of the goods or services exchanged for the contribution.

For noncash contributions of more than $500, the donor must list on their tax return a written description of the donated property and any other information required by the IRS.  If the donation is a vehicle, there are additional reporting requirements.  If there is a noncash donation of $5,000 or more, a qualified appraisal must be attached to the return.

When in doubt of what is required, contact your tax preparer with any questions.