What is the required documentation for cash donations exceeding $250?

When it comes to cash donations that exceed $250, the Internal Revenue Service (IRS) mandates that taxpayers obtain a written acknowledgment from the charitable organization to substantiate their contributions. This acknowledgment must display specific information, including the amount of the donation, a statement regarding whether any goods or services were provided in exchange for the contribution, and if so, a description and good faith estimate of the value of those goods or services.

This requirement ensures that donors have adequate documentation to support their deductions on their tax returns and to verify the contributions during IRS audits. Many organizations provide receipts or letters confirming the donation, making it a key piece of documentation for taxpayers who itemize their deductions on their returns.

While other forms of documentation might be useful in certain situations, such as a personal bank statement showing the transaction, the IRS clearly specifies that a formal receipt from the charitable organization is necessary for cash donations that exceed the $250 threshold. This emphasizes the importance of maintaining a robust record-keeping strategy to ensure compliance with tax regulations.