Charitable Contribution Deductions: Documentation and Limits

Overview

Charitable contribution deductions reduce your taxable income when you give to qualified organizations. The IRS allows deductions for cash, property, and certain out-of-pocket volunteer expenses, but only when you have the right documentation and you stay within the statutory limits based on adjusted gross income (AGI). This article explains what records the IRS expects, the most common AGI limits, special rules (including carryovers and Qualified Charitable Distributions), and practical steps I use in practice to protect clients’ deductions.

Which organizations qualify?

Deductions generally require the recipient to be a qualified organization (most commonly a 501(c)(3) public charity). Governments, religious organizations, educational institutions, and many public charities qualify. Contributions to individuals, political candidates, or foreign charities are usually not deductible. Confirm an organization’s status using the IRS Tax Exempt Organization Search (see IRS guidance below).

Sources: IRS, Charitable Contributions and Publication 526 (IRS.gov)

Documentation checklist (what the IRS wants)

• Cash gifts under $250: A bank record (canceled check, credit card receipt, electronic fund transfer statement) or a written communication from the charity that shows the organization’s name, date, and amount. (IRS Pub. 526)
• Cash gifts of $250 or more: A contemporaneous written acknowledgment from the charity that states whether you received any goods or services in exchange and, if so, a good-faith estimate of their value. The acknowledgment must be obtained by the earlier of the date you file your return or the due date (including extensions). (IRS requirement)
• Noncash gifts of any value: Keep a description of the donated property and how you determined its value. For clothing and household items, those items must be in good used condition or better to be deductible. (IRS Pub. 526)
• Noncash gifts valued over $500: You must complete and attach Form 8283, Noncash Charitable Contributions, to your return. (Form 8283 instructions)
• Noncash gifts over $5,000: Generally require a qualified appraisal and an appraiser’s signed statement; you must still file Form 8283 and attach the appraisal when required. Publicly traded securities are an exception and usually don’t need an appraisal. (Section 170(f)(11) and Form 8283 guidance)
• Vehicle and boat donations: Special rules apply (valuation, Form 1098-C, or other acknowledgment); follow the IRS vehicle donation rules carefully.

For step-by-step documentation guidance see our guide: How to Document Charitable Donations for Maximum Deduction.

AGI limits — the big picture

The tax code caps deductible charitable contributions as a percentage of your AGI. The most common limits for individual taxpayers are:

• Cash gifts to public charities, certain private operating foundations, and charitable remainder trusts: generally deductible up to 60% of your AGI. (IRS Pub. 526)
• Gifts of appreciated capital gain property to public charities (for example, long-term appreciated stock): generally limited to 30% of AGI if you claim the fair-market-value deduction. If you instead deduct the cost basis, different limits may apply. (IRS Pub. 526)
• Gifts to certain private foundations, veterans’ organizations, fraternal societies and nonprofit cemeteries: often subject to lower limits (for example, 30% or 20% rules depending on gift type and recipient). The recipient’s classification changes the applicable limit, so confirm the charity’s type. (IRS Pub. 526)

Note: Temporary COVID-related suspension or special higher limits that applied in certain past years have expired; current year limits are the standard rules described above. Always check current IRS guidance before filing.

Carryovers and timing

If your total charitable deductions exceed the AGI limits, you can carry forward the unused portion for up to five tax years. Carryovers are applied in the earliest possible year and subject to the same percentage limitations in later years.

Keep explicit records of the original gift, the amount claimed each year, and any remaining carryover balance. In my tax practice I maintain a simple carryover ledger for clients who make large or irregular gifts; this prevents mistakes and lost deductions when returns are prepared in later years.

Special rules to watch

• Qualified Charitable Distributions (QCDs): IRA owners age 70½ and older (and under current law, eligible for QCD rules) can donate up to $100,000 directly from a traditional IRA to qualified charities and have the transfer count against required minimum distributions without taking the distribution as taxable income. QCDs are not reported as charitable itemized deductions — they reduce taxable income directly and are often preferable for taxpayers who don’t itemize. See our guide on QCDs: Qualified Charitable Distributions: A Guide for IRA Owners.
• Donor-Advised Funds (DAFs): Contributions to a DAF are generally treated as gifts to public charities for deduction-limit purposes, but once contributed you typically cannot recommend grants that return funds to you or to certain private interests. Strategy matters—making the gift of appreciated securities to a DAF often gives the same AGI advantage as giving directly to charity.
• Appreciated securities: Donating long-term appreciated publicly traded securities is often tax-efficient — you can usually deduct fair market value (subject to the 30% limit for capital-gain property to public charities) and avoid paying capital gains tax on sale.

Valuation and appraisals

Valuing noncash gifts correctly is essential. For most household items and clothing, deduct at fair market value but only if items are in good used condition or better. For property over $5,000, the IRS generally requires a qualified appraisal and completion of Form 8283 Section B (with the charity’s signature) when applicable.

For detailed noncash reporting rules see our article: Form 8283 – Noncash Charitable Contributions and the IRS Form 8283 instructions.

Common mistakes and audit triggers

• No contemporaneous written acknowledgment for gifts of $250 or more.
• Claiming full fair market value for heavily used or broken household items (these often have little or no deductible value).
• Forgetting to attach Form 8283 when required, or failing to get the donee organization’s signature for high-value donations.
• Misclassifying the donee (donating to a foreign or nonqualified entity and incorrectly claiming a deduction).

These errors are frequent audit triggers. In my practice, clients who keep a clear file with receipts, bank records, appraisals, and a short memo for large gifts are far less likely to face IRS questions.

Practical tips to protect and maximize deductions

1. Always get a contemporaneous written acknowledgment for gifts of $250 or more. That single document resolves many common issues.
2. Use stock or mutual fund shares for larger gifts when possible — it can avoid capital gains tax and often simplifies valuation.
3. For irregular or large annual giving, consider “bunching” multiple years of donations into one tax year to exceed the standard deduction threshold and itemize. See our guide: Bunching Charitable Donations: A Practical Guide for Itemizers.
4. Keep a folder (physical or digital) per tax year with receipts, acknowledgments, bank records, Form 8283 copies, and appraisals. Retain them at least until the IRS statute of limitations expires (usually three years), and for up to six years if you claim large deductions or carryovers.
5. When donating vehicles or boats, obtain the Form 1098-C or written acknowledgment and follow valuation rules carefully.

Real-world examples

• Example 1 — Cash gift properly documented: A client donated $10,000 via online transfer to a qualified university and downloaded the emailed acknowledgment showing date and amount. The client kept the bank record and claimed the cash deduction without issue. Documentation matched IRS expectations.
• Example 2 — Noncash pitfall: Another client gave a pickup truck to charity but had no title transfer or written sale/acknowledgment and lacked an appraisal. The client could not substantiate the claimed $8,000 deduction and had to remove it when preparing an amended return.

Recordkeeping timeline (practical rule of thumb)

• Immediate: Get the written acknowledgment for gifts $250 or more.
• Within 60 days of large noncash donations: obtain and file appraisals if over $5,000.
• Keep all records for at least three years; retain longer (5–6 years) when you have large carryovers or claimed large deductions.

Final checklist before you file

• Do you have bank or credit card records for cash gifts and the charity’s written acknowledgment for gifts $250+?
• Did you complete and attach Form 8283 for noncash gifts over $500?
• Do you have a qualified appraisal for items over $5,000 when required?
• Did you verify the organization’s qualified status?

If you can answer “yes” to each, your return will be better positioned to withstand IRS review.

Resources and authoritative references

• IRS — Charitable Contributions: https://www.irs.gov/charities-non-profits/charitable-contributions
• IRS Publication 526, Charitable Contributions: https://www.irs.gov/publications/p526
• IRS Form 8283 and instructions: https://www.irs.gov/forms-pubs/about-form-8283

Disclaimer

This article provides educational information and general guidance, not individualized tax advice. Tax rules change and details can affect outcomes. For specific planning or to apply these rules to your situation, consult a qualified tax professional or CPA.

If you want, I can prepare a one-page client-ready checklist (PDF-friendly) listing the exact records to collect for common donation types.