Year-End Financial Responsibilities – Donor Statements
Part 4 – Donor Statements
The IRS requires that the DONOR to a church or nonprofit seeking a federal income tax deduction for a charitable gift must produce, if requested, a cancelled check, a bank record or a written receipt from the charitable organization for all gifts of currency and other single contributions valued at $250 or more.
The burden of proof falls on the donor. However, practically speaking, and in the interest of facilitating gifts, the church normally provides the proof of charitable gifts with a written receipt at year-end.
Churches generally try to get these statements out by January 31. There is no legal deadline other than providing the receipt, if requested, prior to the time the taxpayer’s return is due or filed.
What Information Must Be on the Annual Donor Statement?
- The donor’s name
- Monetary Funds, the amount given/received
- Property, a description with NO value assigned by the church (autos, boats, airplanes require more documentation)
- A statement explaining whether the ministry provided any goods or services to the donor in exchange for their contribution
- If goods or services were provided, an estimate of the fair value of those should be provided and deducted from the total contribution.
- If NO goods or services were provided, the statement must say so.
- Date the donation was made
- Date the statement was issued (recommended) By the way, these statements are traditionally delivered by January 31, but the IRS only requires they be delivered prior to the taxpayer taking the deduction on their personal tax return or by the tax return deadline date.
More details about various giving situations that may be reported on the giving statement are available in our Giving blog here.
You’ve made it through year-end, preparing the financial statements, filing tax forms and preparing giving statements. What’s next? Let’s talk about your fiscal year now. Watch out for my blog on this soon!
As always, contact GoodBooks today if we can help your church setup your bookkeeping system for keeping good books in the most efficient way.