Claiming Charitable Donations for 2023 Tax Year
Posted by Isabella Newman on January 30, 2024
Have you contributed to charity in the past year? If so, you might have received acknowledgment letters from the charitable organizations you supported. But what if you haven't received such a letter? Can you still claim a deduction for your gift on your 2023 income tax return? Well, it's not a straightforward answer.
According to the law, to substantiate a charitable donation and claim a tax deduction, you must adhere to IRS requirements. For donations of $250 or more, this involves obtaining a contemporaneous written acknowledgment from the charity. This acknowledgment should state the donation amount, whether you received any goods or services in exchange, and the value of those goods or services.
"Contemporaneous" means obtaining this acknowledgment no later than either the date you file your tax return or the extended due date of your return. So, if you made a donation in 2023 but haven't received proper substantiation from the charity yet, don't worry—it's not too late, as long as you haven't filed your 2023 return. Reach out to the charity promptly and request the necessary written acknowledgment.
It's important to note that if you made a cash donation of less than $250 via check or credit card, a canceled check, bank statement, or credit card statement is usually sufficient. However, if you received something in return for your donation, you generally need to reduce your deduction by the value of what you received—and the charity must provide written acknowledgment as previously described.
Unfortunately, for tax years 2022 and 2023, there's no longer a tax break available for nonitemizers. Previously, individuals who didn't itemize deductions could claim a limited federal income tax write-off for cash donations under certain COVID-19 relief laws for 2020 and 2021. However, this option is no longer applicable.
Certain donations may have additional requirements for substantiation. For instance, if you donate property worth more than $500, you must include a completed Form 8283 (Noncash Charitable Contributions) with your return. Additionally, for donated property valued at over $5,000, you generally need to obtain a qualified appraisal and attach an appraisal summary to your tax return.
If you're uncertain about whether you have the necessary substantiation for deductions on your 2023 tax return or need guidance on substantiation for upcoming gifts, feel free to reach out to us. We can provide assistance to ensure you meet the requirements for claiming deductions on your 2024 return.
for more information
Isabella is a manager in the tax department, providing tax compliance and planning services to a variety of commercial businesses and individuals. While a student at Daemen University, she served as chief editor to the school’s literary magazine. Prior to joining Lumsden McCormick, Isabella had experience working at a local accounting firm.