Overview
Charitable donations can provide meaningful tax savings when handled correctly, but the benefit depends on following strict IRS substantiation and recordkeeping rules. In my 15 years helping clients plan donations and prepare tax returns, I’ve seen how small documentation gaps—lost receipts, missing forms, or misapplied AGI limits—turn otherwise valid deductions into denied claims. This article explains what receipts the IRS requires, how contribution limits work in practice, and practical recordkeeping steps that protect you during tax preparation or an audit.
Which organizations qualify?
To deduct a contribution, you must give to a qualified organization as defined by the IRS (typically 501(c)(3) charities). Use the IRS Tax Exempt Organization search or the organization’s EIN to confirm status before donating (see IRS Charitable Contributions guidance: https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-contributions).
Receipts and written acknowledgments: what the IRS requires
- Cash donations under $250: A bank record (cancelled check, bank statement, or credit card statement) or a written communication from the charity is sufficient.
- Cash donations of $250 or more: You need a contemporaneous written acknowledgment from the charity. The acknowledgment must state the amount given, whether you received any goods or services in return, and provide a description (not value) of any goods or services received (IRC Sec. 170(f)(8); see IRS Pub. 526: https://www.irs.gov/publications/p526).
- Noncash gifts over $500: File Form 8283 (Noncash Charitable Contributions) with your tax return. The form requires details about the donated property and, for single items or groups with deduction > $5,000, a qualified appraisal and the donee’s acknowledgement (Pub. 526 and Form 8283 instructions).
- Vehicle donations: If you claim more than $500 for a donated vehicle, the charity must provide Form 1098-C or a contemporaneous written acknowledgment. If the charity sells the vehicle without significant use or material improvement, your deduction is limited to the sale proceeds shown on Form 1098-C (IRS vehicle donation rules: https://www.irs.gov/charities-non-profits/charitable-organizations/donating-a-car-boat-or-airplane).
“Contemporaneous” means you must get the written acknowledgment by the earlier of the date you file your return for the year of the gift or the due date (including extensions) for filing the return.
AGI limits and how they apply
The IRS caps deductible charitable contributions based on your adjusted gross income (AGI). General rules as of 2025:
- Cash donations to public charities: Up to 60% of AGI (for most individual taxpayers who itemize).
- Long-term appreciated capital gain property given to public charities: Generally limited to 30% of AGI when you deduct fair market value.
- Other non-cash gifts: Typically limited to 50% of AGI in certain categories.
These categories can be complex because deductibility depends on the type of property, the donee organization (public charity vs. private foundation), and whether you take the fair-market-value deduction for appreciated property. If your gifts exceed the AGI limits, you may carry forward the unused amount for up to five tax years (IRS Pub. 526).
Practical example: If your AGI is $100,000 and you donate $70,000 cash to a qualifying public charity, you can generally deduct $60,000 in the current year and carry forward the remaining $10,000 for up to five years, subject to the same AGI limits in later years.
Noncash donations: valuation and documentation
- Publicly traded securities: If you donate long-term appreciated stock, you can usually deduct fair market value without recognizing capital gain, provided you held the shares for more than one year. Brokerage statements showing the transfer date, quantity, and value are primary documentation.
- Tangible property (clothes, household goods): Deductible only if the items are in good used condition or better. For items valued at more than $500, list items on Form 8283 and follow appraisal rules when applicable.
- Single-item noncash gifts over $5,000: Generally require a qualified appraisal and a completed Section B of Form 8283.
Caveat: valuation is often contested in audits. Keep contemporaneous notes explaining how you determined value (comparison photos, online comparables, receipts for original purchase). For highly appreciated or unusual property, obtain a qualified appraisal before or shortly after donation.
Required forms and filing tips
- Form 8283: Required for noncash donations totaling more than $500. Certain sections must be completed and signed by the charity.
- Form 1098-C: For vehicle, boat, or airplane donations where the deduction is based on the sale proceeds.
- Schedule A (Form 1040): Itemize deductions and report charitable contributions if you are not taking the standard deduction.
If you use a donor-advised fund (DAF), remember that you receive the deduction when you contribute to the DAF — not when the fund grants to the final charity. That timing affects the tax year of your deduction and potential AGI-limit planning.
Recordkeeping best practices (practical checklist)
- Collect contemporaneous written acknowledgments for all gifts of $250 or more.
- Save bank and credit card records for small cash gifts and online donations.
- Keep screenshots or emailed receipts for online donations; encourage charities to include EIN and donation date.
- For securities and brokerage transfers, keep broker confirmation of the transfer and year-end statements showing the donation.
- For noncash gifts, maintain photos, receipts, and a valuation memo; file Form 8283 when required.
- Keep records for at least three years after filing; if you claim carryforwards or rely on valuation/appraisals, retain records for six years or longer. (Statute of limitations guidance: IRS audit timelines vary; consult Pub. 526 and a tax advisor.)
In my practice I recommend a dedicated digital folder (PDF copies of acknowledgments, screenshots, and a spreadsheet summary). That single source simplifies year-end reporting and speeds audit responses.
Common errors and how to avoid them
- Missing the written acknowledgment for donations ≥ $250. Fix: request an acknowledgment at the time of donation and download or email a copy.
- Overvaluing donated property. Fix: use conservative, supportable valuations and obtain qualified appraisals when required.
- Not filing Form 8283 for required noncash gifts. Fix: track noncash donations during the year and prepare 8283 early.
- Confusing donor-advised funds and final distributions. Fix: know when the deduction is taken (at contribution to the DAF).
Example scenarios
1) Small, recurring online gifts: Keep credit card statements and the charity’s email receipt. If total cash gifts exceed $250 to one charity in a year, get the written acknowledgment.
2) Donating stock: Transfer shares directly from your brokerage to the charity’s broker. Keep the transfer confirmation and year-end statement; you generally deduct fair market value if you held the shares more than one year.
3) Donating a car: Get Form 1098-C from the charity if it sells the vehicle; otherwise the charity’s contemporaneous acknowledgment must support your claimed deduction.
Planning tips to maximize tax benefit
- Bunching: Combine multiple years of charitable gifts into one year to exceed the standard deduction and itemize (see our FinHelp guide on Creative Charitable Giving: Bunching, Gifting, and Non-Cash Donations).
- Use appreciated securities instead of cash: You usually avoid capital gains tax and still deduct fair market value if held long-term.
- Time gifts: Make gifts before year-end and confirm the charity’s receipt date to match the tax year of your return.
Related resources on FinHelp:
- Creative Charitable Giving: Bunching, Gifting, and Non-Cash Donations — https://finhelp.io/glossary/creative-charitable-giving-bunching-gifting-and-non-cash-donations/
- How to Track Charitable Giving for Year-End Deductions — https://finhelp.io/glossary/how-to-track-charitable-giving-for-year-end-deductions/
- How to Document Charitable Donations for Tax Time — https://finhelp.io/glossary/how-to-document-charitable-donations-for-tax-time/
Audit signals the IRS watches
- Large or repeated noncash donations with weak substantiation.
- Appraisals dated long after the contribution.
- Donating to organizations that are not qualified charities.
If audited, provide the contemporaneous acknowledgments, bank/broker records, Form 8283, and any appraisals. Timely, organized records usually resolve questions quickly.
Final checklist before you file
- Do you have written acknowledgments for gifts ≥ $250?
- Have you prepared Form 8283 for noncash donations > $500?
- Do you have broker confirmations for securities gifts?
- Have you confirmed the donee’s tax-exempt status?
- Have you calculated AGI limits and applied any carryforwards from prior years?
Professional disclaimer
This article is educational and general in nature and does not replace personalized tax advice. Tax laws change frequently; consult a qualified tax professional or CPA about your specific situation. See official IRS guidance at Publication 526 and the Charitable Contributions pages: https://www.irs.gov/publications/p526 and https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-contributions.
Authoritative sources
- IRS Publication 526, Charitable Contributions — https://www.irs.gov/publications/p526
- IRS – Charitable Contributions (organization status, acknowledgments, and deduction limits) — https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-contributions
By keeping clear receipts, knowing the AGI-based deduction rules, and retaining organized records, you protect your tax benefits and make charitable giving both generous and tax-efficient.
