I worry about all the folks going to church this morning. (I use “church” as a term that could be easily replaced with other houses of worship: synagogue, mosque, etc.) Here’s my specific concern: when the collection plate comes around, do folks give cash? Probably. And if so, are they documenting their charitable gift? Probably not. For most people, it’s a $20 here and a $10 there, but over the course of many Sundays that can add up quickly. The total figure of such donations to a tax-exempt organization, like your church, could be claimed as a federal income tax charitable deduction. But, without substantiation, you cannot claim the beneficial charitable deduction.
The IRS requires you to have records and documents backing up your claims of charitable donations. The greater the amount of the deduction you seek, the more records that are required. Let’s start with a basic category: gifts of cash less than $250.
Substantiation requirements for monetary gifts less than $250
A federal income tax deduction for a charitable contribution in the form of cash, check, or other monetary gift is not allowed unless the donor substantiates the deduction with a bank record or a written communication from the donee showing the name of the donee, the date of the contribution, and the amount of the contribution.
Meaning of “monetary gift”
For this purpose, the term “monetary gift” includes, of course, gifts of cash or by check. But monetary gift also includes gifts by use of:
credit card;
electronic fund transfer;
online payment service;
payroll deduction; or
transfer of a gift card redeemable for cash.
Meaning of “bank record”
Again, to claim the charitable deduction for any monetary gift, you need a bank record or written communication from the donee. The term “bank record” includes a statement from a financial institution, an electronic fund transfer receipt, a cancelled check, a scanned image of both sides of a cancelled check obtained from a bank website, or a credit card statement.
Meaning of “written communication”
The term “written communication” includes email. Presumably it also includes text messages. But, again, the written communication, whether paper or electronic, it must show the name of the donee, the date of the contribution, and the amount of the contribution.
I must repeat. A federal income tax deduction for a charitable contribution in the form of cash, check, or other monetary gift is not allowed unless the donor substantiates the deduction with a bank record or a written communication from the donee showing the name of the donee, the date of the contribution, and the amount of the contribution.
How about monetary gifts [as defined above] which are $250 or more? As to cash contributions of at least $250, an extra set of substantiation rules apply. Click here to read more.
Responsibility lies with the donor
Interestingly, the responsibility for obtaining this documentation lies with the donor. The donee (the charity) is not required to record or report this information to the IRS on behalf of the donor.
If this sounds like a lot, know you don’t have to navigate these requirements just by yourself. Contact me at any time to discuss your situation and charitable giving goals. We’ll figure out the best course of action together.
https://www.gordonfischerlawfirm.com/wp-content/uploads/2015/04/annie-spratt-419289.jpg16363000Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2018-01-14 06:15:492020-05-18 11:28:56Giving to your Church's Collection Plate? Substantiation of Gifts of Cash Less Than $250
Happy New Year! It’s 2018 and if you’re like me, “Auld Lang Syne” was playing merrily in the background as a cup of cheer was raised and confetti fluttered on New Year’s Eve. The title and main chorus of song ubiquitous with the holiday roughly translates to “for old times’ sake.” On that note I’ve spent some quality time (like the song eludes to) reminiscing about the year that’s gone by. I’ve reviewed what Gordon Fischer Law Firm tackled in 2017, but more importantly I’m looking ahead to where we want to go, how to get there, and how to improve along the way. I have a few “resolutions” I want to share…resolutions we actually intend to keep! These goals will work to further advance the mission of the firm “to promote and maximize charitable giving in Iowa.”
Post even more regular content on the GoFisch blog to make it ever easier for both donors and donees to effectuate charitable giving to/for their favorite causes.
Additionally, I would like to produce a regular specific newsletter for professional advisors (accountants, financial advisors, insurance agents, and fellow lawyers) with smart planning information to be able to further help Iowans.
Present an all-day seminar (for continued education credits) targeted to both nonprofit leaders and professional advisors to discuss all aspects of charitable giving and facilitate beneficial networking.
Continue demystifying estate planning for all Iowans—complete with basic forms to help that process along.
Tomorrow I’ll highlight aspects of estate planning and charitable giving you can (and should) incorporate into your goals for 2018. Do you already have such goals in mind? A few examples could be to stop making excuses to avoid estate planning, finally establish that living trust, or consult with a professional about a retained life estate. Don’t hesitate to contact me to discuss. Together we’ll likely be able to set a plan in place for you to achieve your goals (or resolutions) to truly make 2018 your best year yet.
https://www.gordonfischerlawfirm.com/wp-content/uploads/2018/01/warren-tobias-204308.jpg17282592Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2018-01-03 16:47:342020-05-18 11:28:56Happy New Year from GFLF: Looking Ahead with Resolutions
https://www.gordonfischerlawfirm.com/wp-content/uploads/2017/12/Neon-New-Year-Facebook-Cover.png315851Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2017-12-31 11:41:182020-05-18 11:28:56Read GoFisch: Last Newsletter of 2017
Giving to your Church’s Collection Plate? Substantiation of Gifts of Cash Less Than $250
Charitable Giving, Taxes & FinanceI worry about all the folks going to church this morning. (I use “church” as a term that could be easily replaced with other houses of worship: synagogue, mosque, etc.) Here’s my specific concern: when the collection plate comes around, do folks give cash? Probably. And if so, are they documenting their charitable gift? Probably not. For most people, it’s a $20 here and a $10 there, but over the course of many Sundays that can add up quickly. The total figure of such donations to a tax-exempt organization, like your church, could be claimed as a federal income tax charitable deduction. But, without substantiation, you cannot claim the beneficial charitable deduction.
The IRS requires you to have records and documents backing up your claims of charitable donations. The greater the amount of the deduction you seek, the more records that are required. Let’s start with a basic category: gifts of cash less than $250.
Substantiation requirements for monetary gifts less than $250
A federal income tax deduction for a charitable contribution in the form of cash, check, or other monetary gift is not allowed unless the donor substantiates the deduction with a bank record or a written communication from the donee showing the name of the donee, the date of the contribution, and the amount of the contribution.
Meaning of “monetary gift”
For this purpose, the term “monetary gift” includes, of course, gifts of cash or by check. But monetary gift also includes gifts by use of:
Meaning of “bank record”
Again, to claim the charitable deduction for any monetary gift, you need a bank record or written communication from the donee. The term “bank record” includes a statement from a financial institution, an electronic fund transfer receipt, a cancelled check, a scanned image of both sides of a cancelled check obtained from a bank website, or a credit card statement.
Meaning of “written communication”
The term “written communication” includes email. Presumably it also includes text messages. But, again, the written communication, whether paper or electronic, it must show the name of the donee, the date of the contribution, and the amount of the contribution.
I must repeat. A federal income tax deduction for a charitable contribution in the form of cash, check, or other monetary gift is not allowed unless the donor substantiates the deduction with a bank record or a written communication from the donee showing the name of the donee, the date of the contribution, and the amount of the contribution.
How about monetary gifts [as defined above] which are $250 or more? As to cash contributions of at least $250, an extra set of substantiation rules apply. Click here to read more.
Responsibility lies with the donor
Interestingly, the responsibility for obtaining this documentation lies with the donor. The donee (the charity) is not required to record or report this information to the IRS on behalf of the donor.
If this sounds like a lot, know you don’t have to navigate these requirements just by yourself. Contact me at any time to discuss your situation and charitable giving goals. We’ll figure out the best course of action together.
Happy New Year from GFLF: Looking Ahead with Resolutions
Charitable Giving, Estates & Estate Planning, From Gordon's Desk..., NonprofitsHappy New Year! It’s 2018 and if you’re like me, “Auld Lang Syne” was playing merrily in the background as a cup of cheer was raised and confetti fluttered on New Year’s Eve. The title and main chorus of song ubiquitous with the holiday roughly translates to “for old times’ sake.” On that note I’ve spent some quality time (like the song eludes to) reminiscing about the year that’s gone by. I’ve reviewed what Gordon Fischer Law Firm tackled in 2017, but more importantly I’m looking ahead to where we want to go, how to get there, and how to improve along the way. I have a few “resolutions” I want to share…resolutions we actually intend to keep! These goals will work to further advance the mission of the firm “to promote and maximize charitable giving in Iowa.”
At Gordon Fischer Law Firm we fully intend to:
Tomorrow I’ll highlight aspects of estate planning and charitable giving you can (and should) incorporate into your goals for 2018. Do you already have such goals in mind? A few examples could be to stop making excuses to avoid estate planning, finally establish that living trust, or consult with a professional about a retained life estate. Don’t hesitate to contact me to discuss. Together we’ll likely be able to set a plan in place for you to achieve your goals (or resolutions) to truly make 2018 your best year yet.
Read GoFisch: Last Newsletter of 2017
From Gordon's Desk..., NewsletterThe December edition of GoFisch is live! Give GoFisch a read for:
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