If you’re an individual taxpayer, the tax forms required to be included with your tax return when taking a deduction for charitable contributions can range from being quite simple to somewhat complex – depending on a few circumstances. If you take the Charitable Contributions Deduction, in the end you will always do so on lines 16-19 of Schedule A, which then “flows-through” to your Form 1040.1 For a majority of taxpayers, only a Form 1040 Schedule A “Itemized Deductions” needs to be included with their tax return. However, in certain cases, you may need to obtain or fill out additional forms or documentation, and you may also need to include some of them with your return. In this article, we’ll discuss the forms you may need in order to claim your Charitable Contributions Deduction. Let’s begin with Schedule A and work our way deeper into the forms from there.
Schedule A (Form 1040) “Itemized Deductions”
If you itemize your deductions on your tax return, you will always include a completed Form 1040 Schedule A with your tax return.2 This includes whenever you take the Charitable Contributions Deduction. As mentioned, the Charitable Contributions Deduction is taken on Lines 16-19. The line or lines you will you use depend on the type of contribution that you make, as well as the value of your contributions. If you make contributions to charitable organizations by cash, check, debit card or credit card,3 you will enter the total value of your contributions on Line 16 of Schedule A. If you make any contributions of property in addition to or instead of cash, you will enter the total value of your property contributions on Line 17 of Schedule A. If you have any carryover of charitable contributions from the previous tax year that you can take in the current tax year, you will include it in Line 18 of Schedule A. The sum of Lines 16, 17 and 18 are then entered on Line 19.
So let’s say that during the year 2013 you make two charitable contributions to the local Goodwill: one donation is a payment of $40 by credit card, and one donation is used clothing worth $20. Your charitable contributions deduction for the year will be $60, and the “Gifts to Charity” section of your Schedule A will look like the following illustration:
With contributions that small, the forms required to be included with your tax return are simple enough. Sometimes, however, you will also be required to file a Form 8283.
Form 8283 “Noncash Charitable Contributions”
Here’s the general rule for Form 8283: if the total value of your property contributions is more than $500, you must include Form 8283 with your tax return. Form 8283 has two Sections – in most cases, you’ll only need to complete Section A, and only Part I of Section A. Part I contains two sets of boxes for each individual item of property you donated (see illustration below). To fill out these boxes, you’ll need the name and address of the organization you donated the property to, a description of the property (including whether it’s a vehicle, discussed later), the date you contributed the property, the fair market value of the property,4 and the method used to determine the fair market value.
So what about Part II of Section A, and what about Section B? Part II of Section A is for donations of partial interests in property, which is a rare type of donation most of us don’t need to be concerned about. Section B is for taxpayers who donate property worth in excess of $5,000 at the time of donation. Section B basically constitutes a summary of a “qualified appraisal” that taxpayers who make such hefty donations are required by law5 to obtain. Unless you’re donating real estate, an expensive piece of art, or a Ferrari, you probably won’t be required to fill out this section.
What Documentation for my Charitable Contribution Will I Need?
Between Schedule A and Form 8283, 95% of tax returns where the charitable contributions deduction is taken are covered (we’re not going to discuss any of the rest in this article). However, in addition to these standardized forms, you are required to retain some records of your contribution in the form of financial records and, in the case of larger contributions, a “contemporaneous written acknowledgment” as proof of your contribution in the event that your tax return is audited by the IRS. We’ll discuss these next.
Financial Records For all contributions, no matter the value, you must obtain or maintain a reliable financial record as evidence of your contribution made.6 Preferably, a reliable financial record would be a cancelled check, credit card statements, or a receipt from the organization you made a contribution to that shows the date you made the contribution, the name of the charitable organization that received your contribution, and the amount of the contribution. It is considered acceptable as a reliable financial record if the taxpayer maintains regular and detailed financial journals of the taxpayer’s income and expenses,7 but this should only be relied on when it’s impracticable for the taxpayer to get a receipt for their donation (such as when making a small cash donation at a collection box at a church or to the Salvation Army in front of a grocery store during Christmas-time).
So what if you’re not the kind of person who keeps meticulous financial journals? If the contribution is fairly small (less than $250), it’s also acceptable if you get a “token” or “emblem” that is typically given to those who make donations.8 One example of this relates to fire departments, who often run a “Fill the Boot” campaign to raise funds. In my experience, whenever I make a donation, I am given a sticker. This could reasonably be considered a token or emblem evidencing that I made a contribution. Keep in mind, though, that these exceptions only work for cash contributions, not property contributions. However, if it’s also impracticable to get a receipt for property donations, such as when you drop off donations at a collection box (like the one in the picture to the right), it’s acceptable if you have only “reliable written records” of your donation. A reliable written record in this case should contain information on what organization received the donation, when and where the property was donated, and a description of the property donated. You can keep this information in a list each time you make such donations. It’s also helpful to take pictures of property you donate to keep with your records.
Do I include Written/Financial Records of Contributions with my Tax Return? No, you do not. However, if you get audited and the IRS questions whether your deduction for your charitable contributions is correct, you will need to produce these financial records as evidence that you really did make a contribution.
For any single donation that exceeds $250, you will be required to obtain a “contemporaneous written acknowledgment” – this is similar to a receipt, and you should be able to obtain these from the organization you make these donations to. For any single donation of property that exceeds $5,000 in value, you would also be required to get a “qualified appraisal” of the property being donated within 60 days of the donation. Obviously, it’s a rare thing for taxpayers to make contributions of property that valuable.9
Once you understand when are required to include Form 8283, and you know what sort of information you’ll need to know and keep in the event your tax return is audited by the IRS, you should be set. Again, in most cases, you’ll simply need to fill out a Schedule A. That said, even though the tax rules for charitable contributions can be come quite complicated, for purposes of most tax returns, it’s enough to know the requirements detailed in this article. If you want more information about the Charitable Contributions Deduction in general, you can read Publication 526.
- Of course, you would only take the charitable contributions deduction if you itemize your deductions rather than take the standard deduction.
- See 2013 Instructions for Schedule A (Form 1040), pg. 1, http://www.irs.gov/pub/irs-pdf/i1040sca.pdf
- Although Lines 16 and 17 respectively reference donations that are “cash or check” and donations “other than by cash or check,” credit card payments are actually considered “cash equivalent,” and any donation made by credit card is considered the same as a donation made by cash or check. IRS Publication 526 “Charitable Contributions” (2013), pg. 18, http://www.irs.gov/pub/irs-pdf/p526.pdf. See also Rev. Rul. 78-38, 1978-1 C.B. 67.
- Determining the fair market value of property contributed can be complicated, so the IRS provides an entire Publication covering this topic: Publication 561 “Determining the Value of Donated Property”. This publication is worth reading if you’re not sure how to value your property donations.
- See Treas. Reg. §1.170A-13(b)(3).
- Treas. Reg. §1.170A-13(a)(1)(iii).
- For more details on this exception, see Treas. Reg. §1.170A-13(a)(2).
- Treas. Reg. §1.170A-13(a)(2)(i)(C).
- Treas. Reg. §1.170A-13(c)(ii)(2).