7 FAQs about Year End Giving

1. If I make a contribution in early
January 2012, can I claim it on my 2011
taxes?

No. Charitable contributions must
be claimed in the year in which they are
delivered.
Example: Mary writes a check to her church
on December 31, 2011, and deposits it in the
church offering on Sunday, January 1, 2012.
Her check is not deductible on her 2011
taxes. She can claim it on her 2012 tax return.

2. If I mail my contribution in
December 2011, but it doesn’t reach
my church until January 2012, for
which year should I claim it?

On your
2011 tax return. A check that is mailed to a
charity is deductible in the year the check
is mailed (and postmarked), even if it is
received early in the next year.
Example: Mary mails (and postmarks) her
check in December 2011. Her church doesn’t
receive the check until January 2012. The
check is deductible on Mary’s 2011 tax return.

3. Can I deduct the value of volunteer
work I did for the church?

No. The
value of personal services is never deductible
as a charitable contribution. However,
unreimbursed expenses you incur in performing
services on behalf of a church or
other charity may be. For 2012, you can
use a “standard mileage rate” of 14 cents to
compute a deduction for any miles you drive
in performing services for your church. Be
sure to maintain accurate records.
Example: John is an electrician. He donates
10 hours of time to his church’s construction
project. He cannot deduct the value of his
donated labor, but he can deduct the value
of materials he purchased in performing the
donated labor.
Example: Several church members go on a
short-term missions project to another country.
The value of their labor is not deductible,
but they can deduct their unreimbursed travel
expenses (transportation, meals, lodging)
incurred in performing the project.

4. I gave $135 to my church when I
registered for a spring retreat. Can I
deduct that?

No, assuming you received
benefits (e.g., lodging, instruction, materials)
worth $135 or more. Charitable contributions
generally are deductible only to
the extent they exceed the value of any
premium or benefit received by the donor in
return for the contribution.

5. Is there any limit to the amount
of my contributions I can deduct on
my taxes?

Yes. A contribution deduction
ordinarily cannot exceed 50 percent of a
donor’s adjusted gross income (a 30 percent
rule applies in some cases). Donors who
exceed these limits may be able to “carry
over” their excess contribution and deduct
it in future years.

6. I designated my contribution to
the church benevolence fund. Is it
deductible?

That depends. “Designated
contributions” are those made to a church
for a specified purpose. If the purpose is an
approved project or program of the church,
you can deduct the contribution (if you
claim itemized deductions on Schedule A).
Example: Your $100 gift designating the
church benevolence fund is deductible.
However, if you specify that your contribution
be applied to a named individual, then
no deduction is allowed—unless the church
exercises full administrative and accounting
control over the donated funds.
Example: You donate $200 to the church and
instruct the church treasurer to give the $200
to a specified needy family in the church. This
contribution is not tax-deductible.
Contributions to a church or missions agency
that designate a particular missionary
may be tax-deductible if the church or missions
agency exercises full administrative
control over the contributions and ensures
that they are spent in furtherance of the
church’s tax-exempt purposes.
Example: You donate $75 to a denominational
missions agency and specify a particular
missionary as the recipient. This contribution
is tax-deductible, even though it
names a missionary, so long as the missions
agency has full administrative and accounting
control over the funds.

7. What kind of records do I need in
order to prove I made a contribution?
For individual cash contributions of under
$250: You must have a bank record (such as a
cancelled check) or a receipt from the church
containing the church’s name, and the date
and amount of each cash contribution.
For individual contributions (cash or
property) of $250 or more: You must
receive a written receipt from your church
that includes the church’s name, the date
and amount of each contribution, and states
whether you received goods or services for
your contributions (and if so, a description
and good faith estimate of the value of the
goods or services received). If you received
no goods or services for the contributions,
then the receipt must say so or indicate
that only “intangible religious benefits” were
received. If you’ve made individual contributions
of $250 or more, don’t file your
federal income tax return until you receive
a contribution statement from your church
that satisfies these requirements. Otherwise,
your contributions may not be deductible.
Canceled checks cannot be used to substantiate
cash contributions of $250 or more.
For non-cash property valued at $500
or more: Other rules apply (see the instructions
to IRS Form 8283). If the value is more
than $5,000, you must obtain a qualified
appraisal of the property and attach an
“appraisal summary” (IRS Form 8283) to
the tax return on which the contribution is
claimed. Some exceptions apply.
For contributions of cars, boats, or planes:
If a church sells the donated property without
significant use, the donor’s contribution
deduction is limited to the sales proceeds. In
addition, the church must provide the donor,
and the IRS, with a written acknowledgement
(use IRS Form 1098-C) by the deadline
prescribed by law. If the church significantly
uses the property, the donor can deduct the
market value. However, the church must still
provide Form 1098-C to the donor and the
IRS. Qualified appraisal and appraisal summary
requirements apply if deduction exceeds
$5,000 (see instructions to Form 8283).

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About Gary Coiro

Nonprofit & Church Leader Nonprofit Leader and Consultant since 2004, following 15 years as a pastor. Competencies include board development, fundraising, staff development and management, strategic planning, church work, Bible teaching, and capital campaigns. Currently consulting and serving on the Church Ministries Management Team for a large multi-cultural evangelical church.
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