Stewardship with Rev. Susan Ranous
November 8, 2023
YEAR END REMINDERS ABOUT CHARITABLE DONATIONS
I thought, as we got closer to the end of the year, that I’d give everyone a list of reminders. I know more and more people aren’t itemizing, so, for many, charitable donations aren’t tax deductions, but some may still itemize and some may still have the mindset of making contributions prior to year-end. So here is a list of information. I think it might be a good idea to include this in your church newsletters as a reminder to folks.
- Only donations made during 2023 are deductible in 2023. A donation made in 2024 will be deductible in 2024.
2. What happens if my contribution that I mailed in December isn’t received by the church until 2024? It all depends on what the postmark is on the envelope. If the postmark is 2023, it is deductible in 2023, even if the envelope isn’t received by the church until 2024.
3. Is the amount I send to the church for a retreat or other event deductible? No. Receiving benefits (attendance at a retreat, a dinner, etc.) worth an amount equal to or greater than the amount you sent in means it is NOT deductible. Only the amount that exceeds what you received would be deductible.
4. I spend a lot of time volunteering at my church. If they had to pay someone to do what I do, it would cost a great deal of money. Can I deduct the value of what I do as a contribution? No. The value of personal services is never deductible. Only the amount of unreimbursed expenses that you spent while doing the services (i.e mileage at the charitable standard rate (14 cents per mile) plus any other out of pocket costs (paper, supplies, etc.)) As an example, a mission trip might have some unreimbursed travel expenses that could be deductible as a charitable contribution.
5. There are IRS limitations on what is a deductible contribution on a tax return. The amount that can be deducted in any given year usually cannot exceed 60% of the adjusted gross income of the taxpayer.
6. What records do I need to keep?
a. No cash contributions can be deducted unless you have a cancelled check, bank statement or credit card statement showing the name of the church, the amount and date, a receipt (or letter or other communication) from the church, or payroll deduction records.
b. For individual contributions (cash or property) of $250 or more, you will need to have a contemporaneous written acknowledgement from the church with the church’s identifying information, a designation of any non-cash contributions and a statement that “no good or services were received in exchange for this contribution other than intangible religious benefits.”
c. For contributions worth more $500 or more, other rules apply. Noncash items worth more than $5000 will require a special tax form on the taxpayer’s return (Form 8283). Exceptions may apply.
d. For donations of cars, boats or planes, there are special rules.
Other reminders for the treasurer/financial secretary:
a. Non-cash donations are not reported on the “normal” giving statements that contain cash donations. A separate letter by the church acknowledging the non-cash item received is what should be used instead, i.e. “500 shares of Apple stock were given on August 1, 2023.” No value specified, and nothing included on the giving statement.
b. Qualified Charitable Distributions (QCD) are also not reported on the normal giving statement. A letter is sent to the donor (owner of the retirement account), acknowledging the receipt of the QCD, amount, date, and from whom it was received (i.e. JPMorgan). A second letter is sent to the company that sent the funds (i.e. JP Morgan). A contribution made via QCD is not deductible by the giver, because the retirement distribution is also not recognized as income by the giver. If you have other question on this, there is an earlier blog that might be helpful. (Qualified Charitable Distribution – February 8, 2023).
Of course, each person should consult with their tax professional to get specific questions answered. These are the general items that pertain to charitable contributions.
If you wish more information on this or would like to discuss stewardship and its relationship with discipleship, please feel free to contact me at (315) 427-3668 or sranousacctg@twcny.rr.com. I’d be happy to help.
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