Cash Donation Receipt Template
A cash donation receipt is a written record of a cash donation paid to a qualified tax-exempt organization in the United States. To the IRS, “cash” donations aren’t just gifts paid in literal cash money; credit card charges, electronic funds transfers, payroll deductions, and personal checks are other examples of cash donations. A “qualified” charitable organization identifies as charitable, educational, literary, religious, scientific, or preventing child and animal cruelty.
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Do I Need a Receipt For Cash Donations?
Cash donation receipts are only necessary if the donor intends to claim a charitable donation deduction on their tax return. The IRS requires submitting a payment statement or written record from the charitable organization with specific details about the donation. Requirements differ for contributions of $250 or less and contributions of more than $250. They also differ for donations that a donor gifted in exchange for goods or services.
When Is a Cash Donation Tax-Deductible?
Cash donations are tax-deductible as long as the receiving entity is a tax-exempt charitable organization or has received a special exemption from the IRS. The only time it’s worthwhile for a taxpayer to claim charitable donations is when their total anticipated deduction is more than the standard deduction for the applicable tax year. The standard IRS deductions for 2022 are:
- Single: $12,950
- Married (filing jointly): $25,900
- Head of Household: $19,400
The IRS does set annual deduction limits. The limit is generally up to 60% of a taxpayer’s adjusted gross income but can be limited to 20%, 30%, or 50%. The percentage depends on the types of donations the taxpayer made and what entities received the donations. If a taxpayer’s desired deduction exceeds the limit in a calendar year, some contributions can carry over to subsequent tax year filings for up to five (5) years.
How Long to Keep the Receipt
The IRS recommends keeping all tax records for at least three (3) years after the due dates of filing. This recommendation is based on the standard three-year statute of limitations that the IRS has to audit taxpayers for inconsistencies or fraud. If the IRS accuses taxpayers of submitting a “substantial understatement of income,” the statute extends to six (6) years. If the IRS suspects outright fraud, it has no statute of limitations on audits.
Are Cash Donations Safe?
Credit card transactions and personal checks are the safest modes of cash donation. They are both one-time charge/withdrawal authorizations and carry paper trails. It is wise for donors to follow up with their financial institutions after making a charitable donation by check or card. Literal cash donations are less safe because they don’t have paper trails. Donors should only pay gifts in hard cash to familiar charitable organizations. They should also get a donation receipt in writing at the time of payment.
Known Donation Scams
The following donation requests are red flags that a donation campaign might be a scam:
- The campaign asks the donor to buy a gift card and send the organization the card codes;
- The campaign asks for a wire transfer through a company like Western Union; and
- The campaign only accepts gifts in cryptocurrency.
Cash Donation Receipt Guidelines
Certain information is vital to include in a cash donation receipt. If the donation is less than $250, the receipt can include the recipient’s name, the date, and the contribution amount. If the gift is more than $250, the receipt needs to include all of the following information:
- Contribution amount;
- Contribution date;
- Method of payment;
- Name, address, EIN, and phone number of the charity organization;
- Name, address, and phone number of the donor;
- Name and signature of the organization’s authorized representative; and a
- Statement that the charitable organization didn’t provide any goods or services to the donor in exchange for the contribution.
No matter what, a cash donation receipt should not include the donor’s social security number or taxpayer-identification number.