How to Document Charitable Deductions for the IRS

How do you document charitable deductions for the IRS?

Proper documentation is what turns a charitable act into a defensible tax deduction. The IRS requires different kinds of records depending on the donation type and size: simple bank or card records suffice for small cash gifts, but written acknowledgments, forms, and appraisals are required as the value increases or when you donate property. Follow the steps below to claim deductions correctly and reduce audit risk (see IRS Publication 526: Charitable Contributions: https://www.irs.gov/publications/p526).

Quick rules at a glance

• Cash donations under $250: keep bank records (cancelled check, bank statement) or a receipt from the charity. (IRS Publication 526)
• Cash donations of $250 or more: require a written acknowledgment from the charity stating the amount and whether any goods or services were provided.
• Noncash donations: label, describe, and value each item. File Form 8283 for noncash contributions over $500; for items (or groups of similar items) over $5,000 you typically need a qualified appraisal and Section B of Form 8283. (Form 8283 instructions: https://www.irs.gov/forms-pubs/about-form-8283)
• Vehicle donations: follow the charity’s written acknowledgement; Form 1098‑C may be issued when the charity sells or uses the vehicle. (IRS guidance on vehicle donations)
• Payroll deductions and payroll gifts: keep pay stubs and employer records showing the charitable payroll withholding.

All deductions are subject to percentage limits relative to adjusted gross income (AGI); these limits vary by type of property and donee. See IRS Publication 526 for current limits.

What records to keep — by donation type

1. Cash (including checks, credit/debit card, electronic transfers, payroll deductions)

• Bank records (cleared check, bank statement) or credit card statements showing the payee, date, and amount.
• Written acknowledgment (a receipt or letter) when a single contribution is $250 or more. The acknowledgment must state the amount and whether any goods or services were provided in return. (IRS Pub 526)
• For payroll deductions, keep your year‑end pay stubs or employer statement.

1. Noncash (clothing, household goods, furniture, electronics, vehicles, stock, real estate)

• A detailed list describing each item, its condition, and the date donated.
• Reasonable method used to determine fair market value (FMV); for common household items, thrift‑store values are often used. Keep notes or sources you relied on.
• Form 8283 when total noncash contributions for the year exceed $500. For noncash items with individual values above $5,000 (for example, a single piece of art, collectible, or real estate), you usually must obtain a qualified appraisal and complete Section B of Form 8283. (Form 8283 instructions)
• For publicly traded securities, keep broker records showing the transfer and the date; these documents also support basis and holding period.

1. Vehicle donations

• Charity’s written acknowledgment that describes the vehicle, date, and either the sale proceeds or intended use. If the charity sells the vehicle, the deductible amount is usually the sale price; if it keeps/uses the vehicle, the amount may be its fair market value — see the charity’s statement.
• Form 1098‑C may be issued by the charity when required.

1. Special gifts (real estate, intellectual property, cryptocurrency)

• For real estate and other complex assets, obtain a qualified appraisal, clear title work, and the charity’s written acknowledgment. File Form 8283 and attach appraisal information as required.
• For cryptocurrency, treat transfers similar to securities: use exchange or wallet records showing date, amount, and transfer details; attach Form 8283 if noncash thresholds apply.

Valuation basics and reasonable support

• Fair market value (FMV) is the price a willing buyer would pay a willing seller when neither is under compulsion to act and both have reasonable knowledge. Use recent comparable sales, thrift‑store guides, or broker quotes depending on the asset.
• Keep photos, screenshots of online sale listings, and notes explaining how you reached the FMV.
• For a donation over $5,000 (noncash), a qualified independent appraisal is generally required and must be attached to the tax return unless exceptions apply. The IRS closely scrutinizes high‑value property donations.

Reporting on your tax return

• Itemize deductions on Schedule A (Form 1040) to claim charitable contributions. If your total itemized deductions are less than the standard deduction, it may not be worth itemizing. See our guide When It Pays to Itemize: A Year‑Round Planner for decision help: https://finhelp.io/glossary/when-it-pays-to-itemize-a-year-round-planner/
• File Form 8283 for noncash contributions when the total noncash donations exceed $500 in a tax year. Section B of Form 8283 requires donee and appraiser signatures for items over $5,000. (Form 8283 resource: https://finhelp.io/glossary/form-8283-noncash-charitable-contributions/ )
• If you received goods or services in return (for example, a charity auction item or dinner), reduce the deductible amount by the fair market value of those goods or services; the charity’s written acknowledgment should state any quid pro quo.

Recordkeeping checklist (keep for at least 3 years; longer if audit or appraisal involved)

• Bank or credit card statements for cash gifts
• Written receipts or acknowledgments for gifts $250+
• Completed Form 8283 (if applicable) with signatures
• Qualified appraisals for donations above $5,000 (or other thresholds per IRS rules)
• Photographs of donated property, serial numbers, and condition notes
• Broker statements or transfer confirmations for stock or securities
• Pay stubs/employer statements for payroll deductions
• Charity correspondence (letters, emails, Form 1098‑C for vehicle donations)

Keep electronic copies and back them up. In my practice advising clients, a single searchable folder with subfolders by year and type of donation saves time during tax preparation or if the IRS asks for documentation.

Common mistakes and how to avoid them

• Relying on bank statements alone when a written acknowledgment is required: obtain the charity’s receipt for donations of $250 or more.
• Overvaluing items: document how you determined FMV and use conservative, supportable figures. For expensive items, get an independent appraisal.
• Forgetting to file Form 8283: missing this form can trigger questions and reduce or disallow the deduction for noncash gifts.
• Donating to nonqualified organizations: only gifts to qualified organizations (generally 501(c)(3) public charities) are deductible. Use the IRS Tax Exempt Organization Search to confirm a charity’s status before donating (https://www.irs.gov/charities-non-profits/exempt-organizations-select-check).

Audit red flags and dealing with IRS inquiries

Large noncash deductions with limited backup, frequent high‑value appraisals, or claiming donations to nonqualified entities are common IRS triggers. If you receive an IRS notice:

• Respond promptly and provide the requested documentation.
• Recreate contemporaneous records if reasonable (date, charity name, amount, and how you determined value).
• Consider professional help: a tax professional or enrolled agent can prepare a response and negotiate on your behalf.

Practical tips to streamline recordkeeping

• Use a spreadsheet or simple donor log that records date, amount, recipient, type of donation, and file link to the receipt.
• Ask charities for written acknowledgments at the time of donation; most major nonprofits will issue electronic receipts immediately.
• For recurring small gifts, request an annual summary from the charity to document cumulative yearly totals.
• If you give through a donor‑advised fund, keep the DAF statements showing the contribution (the deduction occurs when you fund the DAF). See our guide on Donor‑Advised Accounts for additional strategy: https://finhelp.io/glossary/maximizing-impact-with-donor-advised-accounts/

Limits, carryovers, and special rules

• Deduction limits vary: cash gifts to public charities are typically deductible up to 60% of AGI; other limits (20% or 30%) apply for certain property or private foundations. Excess amounts may carry forward for up to five years. See IRS Publication 526 for the latest percentage limits and examples.
• Qualified charitable distributions (QCDs) from IRAs (available to those 70½+ or 72+ depending on tax year rules) exclude the distribution from taxable income but are not an itemized charitable deduction; keep IRA trustee QCD records to prove the transfer.

Final notes and disclaimer

Accurate, contemporaneous documentation is the single best safeguard for claiming charitable deductions. Keep records organized, obtain required written acknowledgments, use Form 8283 when noncash thresholds apply, and get appraisals where necessary.

This article is educational and does not replace personalized tax advice. For specific situations—large gifts, complex assets, or state tax interactions—consult a qualified tax professional or CPA. Authoritative references include IRS Publication 526 (Charitable Contributions), the Form 8283 instructions (https://www.irs.gov/forms-pubs/about-form-8283), and the IRS charitable contributions overview (https://www.irs.gov/charities-non-profits/charitable-contributions).