End of the Year Giving FAQ
Charitable Contributions Tax Reminder
Richard Hammar has answered 7 common questions about reporting charitable contributions when filing your 2021 taxes.
If I make a contribution in early January 2022, can I claim it on my 2021 taxes?
No, charitable contributions must be claimed in the year in which they are delivered.
Mary writes a check to her church on December 31, 2021, and deposits it in the church offering on Sunday, January 2, 2022. Her check is not deductible on her 2021 taxes. She can claim it on her 2022 tax return.
Richard Hammar is a graduate of Harvard Law School, is an attorney and certified public accountant specializing in legal and tax issues for churches and clergy. He is senior editor for Church Law And Tax.
If I mail my contribution in December 2021, but it doesn’t reach my church until January 2022, for which year should I claim it?
On your 2021 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 in the next year.
Mary mails a check to her church in December 2021 that is postmarked 2021. Her church doesn’t receive the check until January 2022. The check is deductible on Mary’s 2021 tax return.
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, meals, instructional 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.
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 2022, you can use a “standard mileage rate” (14 cents per mile) to compute a deduction for any miles you drive in performing services for your church. Be sure to maintain accurate records.
John is an electrician and 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.
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 (i.e., transportation, meals, lodging) incurred in performing the project.
Is there any limit to the amount of contributions I can deduct on my taxes?
In 2020 Congress increased the maximum charitable contribution deduction for cash contributions from 60 percent to 100 percent of adjusted gross income (AGI). This was extended through 2021, but in 2022 the maximum drops back to 60 percent of AGI.
I designated my contribution to the church benevolence fund. Is it deductible?
That depends. “Restricted contributions” are those made by a donor 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 of Form 1040).
If you designate a $100 gift to the church benevolence fund, it is deductible, unless you specify that your contribution be applied to a named individual; then no deduction is allowed.
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.
What kind of records do I need in order to prove I made a contribution?
For individual cash contributions (regardless of amount):
You must have a bank record (such as a cancelled check or bank statement) 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 contemporaneous “written acknowledgment” from your church that includes the church’s name; the date of the contribution; the amount of any cash contribution; a description (but not the value) of non-cash contributions; and one of the following: (i) a statement that no goods or services were provided by the church in return for the contribution; (ii) a statement that goods or services that a church provided in return for the contribution consisted entirely of intangible religious benefits; or (iii) a description and good faith estimate of the value of goods or services other than intangible religious benefits that the church provided in return for the contribution. Canceled checks cannot be used to substantiate cash contributions of $250 or more. You must have a written acknowledgment that satisfies these requirements.
For the written acknowledgment to be considered contemporaneous with the contribution, a donor must receive the acknowledgment by the earlier of the date on which the donor actually files his or her individual federal income tax return for the year of the contribution, or the due date (including extensions) of the return.
If you’ve made individual contributions of $250 or more, don’t file your federal income tax return until you receive a written acknowledgment from your church that satisfies these requirements. Otherwise, your contributions may not be deductible. The church may either provide separate receipts for each single contribution of $250 or more or one acknowledgment to substantiate several single contributions of $250 or more. Separate contributions are not aggregated for purposes of measuring the $250 threshold.
SPECIAL NOTE: The CARES Act (2020)
encouraged Americans to contribute to churches and charitable organizations in 2021 by permitting persons who are unable to itemize deductions on Schedule A (Form 1040) due to the increased standard deduction to deduct up to $300 of cash contributions (up to $600 for married persons filing a joint return). There is no similar provision for contributions of property (clothing, securities, etc.).
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 a deduction exceeds $5,000 (see instructions to Form 8283).