- Gifts of $250 or more: You can claim a deduction for a contribution of $250 or more only if you retain an acknowledgement from a qualified organization or applicable payroll deduction records (i.e. for United Way contributions). All contributions of $250 or more must be documented separately either in the form or separate acknowledgements or by line item if from the same organization in the same year.
- Gifts of less than $250: For contributions of less than $250, you need to retain one of the following: 1) a cancelled check; 2) a credit or debit card receipt; or 3) a checking or credit card statement. The record should include the amount, date posted and the payee.
- Car expenses: If you use your vehicle in giving services to a qualified organization, you should retain a log of mileage, dates and organizations for which you used your auto. You can then claim the standard IRS mileage deduction for the total miles driven.
- Out-of-pocket expenses: You can deduct un-reimbursed out-of-pocket expenses related to service performed for a qualified organization if you keep records that include the amount, date and organization. If the expense exceeds $250, you also will need written acknowledgement from the organization.
- Recordkeeping for property contributions: You should retain a receipt from the organization recording the date and property given for each donation of property. You will be required to file Non-Cash Contribution Form 8283 with your tax return if the total amount of property given exceeds $500 in value in a given year. And if you claim a deduction of over $5,000 for a donation of one property item or a group of similar property items, you must also obtain a qualified written appraisal of the property from a qualified appraiser.
John D. Rockefeller, Jr. once said, "Think of giving not as a duty but as a privilege." If you are one of the 80 percent of Americans who give away some of your hard-earned money to those less fortunate, then you have experienced this privilege alluded to by Rockefeller. And if you follow the guidelines for giving outlined above, you will also remain in good standing with the IRS when tax time rolls around.