Year-End Donation Rules

Critical deadlines, IRS requirements, and essential rules for charitable giving before December 31

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Why Year-End Giving Deadlines Matter

The IRS has strict rules about when charitable donations count for tax deductions. To claim a donation on this year's tax return, you must complete the gift by December 31. Understanding the timing rules, documentation requirements, and deduction limits ensures you maximize your charitable impact and tax benefits.

Critical Year-End Deadline

December 31 at 11:59 PM is the absolute deadline for donations to count toward this tax year. The postmark date matters for checks, but credit card transactions must process by midnight on December 31.

December 31 Deadline Rules by Payment Method

Credit Card Donations

When Credit Card Donations Count

  • Deductible year: The year the charge is made, NOT when you pay the bill
  • Deadline: Must process by 11:59 PM on December 31
  • Online donations: Count as of transaction date shown on confirmation
  • Payment timing: You can pay the credit card bill in January and still deduct in current year
  • Documentation: Keep credit card statement AND charity receipt

Example: Donate $500 by credit card on December 30. Deductible this year, even if you pay credit card bill in February.

Check Donations

  • Postmark rule: Check must be postmarked by December 31
  • Not delivery: Doesn't matter when charity receives or deposits it
  • Keep evidence: Save certified mail receipt or photo of envelope with postmark
  • Post office hours: Get to post office before closing on Dec 31
  • Dating checks: Write date on check, matches tax year

Cash Donations

  • Immediate: Counts as of the date given
  • In person: Must hand over cash by December 31
  • Receipt required: Get written acknowledgment from charity
  • Not recommended: Hard to document, use check or credit card instead

Bank Transfers and ACH

  • Processing time: Allow 3-5 business days before year-end
  • Deductible year: When money leaves your account
  • Safe date: Initiate by December 26 to ensure processing
  • Confirmation: Save bank statement showing withdrawal date

Stock and Securities

  • Complex timing: Must be in charity's account by December 31
  • Start early: Transfer can take 7-10 business days
  • Recommended deadline: Initiate by December 15
  • Irrevocable transfer: Once initiated, you can't cancel
  • Valuation date: Fair market value on date of transfer

Donor-Advised Funds

  • Contribution deadline: Funds must be in DAF by December 31
  • Grant timing: Grants to charities can be made anytime after
  • Deduction timing: Year you contribute to DAF, not when grants are made
  • Year-end contributions: Check DAF provider's deadline (often Dec 28-29)

Documentation Requirements

Donations Under $250

Required Documentation

  • Bank record (canceled check, credit card statement)
  • OR written receipt from charity
  • Receipt must include: charity name, date, amount
  • No acknowledgment letter required

Donations $250 or More

Mandatory Written Acknowledgment

  • From charity: Must receive written acknowledgment
  • Deadline: Before you file tax return or due date, whichever is earlier
  • Contents required:
    • Charity name and EIN
    • Amount of cash contribution
    • Date of contribution
    • Statement: "No goods or services were provided in exchange"
    • OR description and value of goods/services received
  • Your responsibility: Request letter if not provided automatically

Donations Over $500 (Non-Cash)

  • Must file IRS Form 8283 with tax return
  • Keep records of how you acquired property
  • Document original cost or basis
  • Include photos for valuable items

Donations Over $5,000 (Non-Cash)

  • Must obtain qualified appraisal
  • Appraiser must be independent
  • Appraisal must be no more than 60 days before donation
  • File complete Form 8283 with appraisal summary
  • Keep appraisal report for your records

Annual Deduction Limits

Cash Donation Limits

2024 Deduction Limits

Cash to Public Charities:

  • Limit: 60% of Adjusted Gross Income (AGI)
  • Example: $100,000 AGI = max $60,000 deduction
  • Excess carries forward 5 years

Cash to Private Foundations:

  • Limit: 30% of AGI
  • Lower limit due to less public oversight

Important: These limits are total for all donations combined, not per charity

Non-Cash Donation Limits

  • Appreciated property to public charities: 30% of AGI
  • Appreciated property to private foundations: 20% of AGI
  • Capital gain property: Deduct fair market value
  • Ordinary income property: Deduct lesser of cost or FMV

Carryover Rules

  • Excess donations carry forward up to 5 years
  • Use oldest carryover first
  • Track carryovers carefully on tax returns
  • Carryovers still subject to AGI limits each year

What Counts as a Qualified Charity

IRS-Recognized Tax-Exempt Organizations

Deductible Donations

  • 501(c)(3) public charities
  • Religious organizations
  • Educational institutions
  • Hospitals and medical research
  • Government entities for public purposes
  • War veterans organizations

NOT Deductible

  • Political campaigns or candidates
  • Lobbying organizations
  • Individuals (even if needy)
  • Foreign charities (with exceptions)
  • Social clubs
  • Chambers of commerce

Verify Charity Status

  • IRS Tax Exempt Organization Search: IRS.gov/charities-non-profits
  • Search by: Name, EIN, city, state
  • Verify: 501(c)(3) status and current registration
  • Check: Public charity vs private foundation classification

Special Year-End Giving Situations

Qualified Charitable Distributions (QCDs)

IRA Donations for Seniors

  • Who qualifies: Age 70½ or older
  • Amount: Up to $100,000 per year (per person)
  • Deadline: December 31
  • Benefit: Counts toward Required Minimum Distribution
  • Tax advantage: Not included in taxable income
  • Process: Direct transfer from IRA to charity
  • Important: Cannot also claim as itemized deduction

Bunching Donations

Strategy to exceed standard deduction threshold:

  • Concept: Donate 2-3 years' worth in one year
  • Standard deduction 2024: $14,600 (single), $29,200 (married)
  • Example: Instead of $10,000/year for 3 years, donate $30,000 in year 1
  • Year 1: Itemize deductions
  • Years 2-3: Take standard deduction
  • Tool: Donor-advised fund helps implement this strategy

Matching Gift Deadlines

  • Check employer matching program deadline
  • Some employers have December 15 deadline for year-end match
  • Submit match request before company deadline
  • Your donation deductible when you make it
  • Employer match deductible by employer, not you

Common Year-End Donation Mistakes

Mistakes That Cost Deductions

  • Missing December 31 deadline: Waiting too long to process donation
  • No receipt: Claiming $250+ donation without written acknowledgment
  • Wrong documentation: Not getting proper appraisal for high-value items
  • Unqualified charity: Donating to non-501(c)(3) organization
  • Overvaluation: Inflating non-cash donation values
  • Personal benefit: Deducting value of goods/services received
  • Volunteer expenses: Deducting value of your time (not allowed)

What You CAN'T Deduct

  • Value of your time or services
  • Raffle or lottery tickets (even if proceeds go to charity)
  • Tuition payments (even to religious schools)
  • Value of blood donations
  • Donations to specific individuals
  • Political contributions
  • Donated services or free use of property

What You CAN Deduct

  • Out-of-pocket expenses for volunteer work
  • Mileage for charitable activities (14 cents/mile for 2024)
  • Travel expenses for charity work (with restrictions)
  • Cost of supplies purchased for charity
  • Uniforms required for volunteer work

Record Keeping Best Practices

Create a Donation File

Essential Documents to Keep

  • ☐ All written acknowledgment letters
  • ☐ Canceled checks or credit card statements
  • ☐ Charity receipts and tax forms
  • ☐ Form 8283 for non-cash donations
  • ☐ Appraisals for items over $5,000
  • ☐ Photos of donated items
  • ☐ Mileage logs for volunteer driving
  • ☐ Receipts for volunteer expenses

How Long to Keep Records

  • Cash donations: 3 years from tax filing date
  • Property donations: 7 years recommended
  • Real estate donations: Indefinitely
  • Carryover donations: Until carryover is used up

Year-End Giving Checklist

  • ☐ Verify all charities are IRS-qualified 501(c)(3)
  • ☐ Calculate total giving budget and AGI limits
  • ☐ Review carryover deductions from previous years
  • ☐ For stock donations, start transfers by December 15
  • ☐ For checks, mail by December 31 (get postmark proof)
  • ☐ For credit cards, process by 11:59 PM December 31
  • ☐ For QCDs, initiate IRA transfer by mid-December
  • ☐ Request written acknowledgment for donations $250+
  • ☐ Obtain appraisals for non-cash items over $5,000
  • ☐ Complete Form 8283 for property donations
  • ☐ Document volunteer mileage and expenses
  • ☐ Submit employer match requests before deadline
  • ☐ Photograph donated items for records
  • ☐ Create organized file for all donation documentation
  • ☐ Make final year-end donations before midnight Dec 31

Plan Ahead for Maximum Impact

Year-end giving doesn't have to be stressful. Start planning in November, understand the deadlines for your donation method, keep meticulous records, and verify charity qualifications. With proper planning and documentation, you can maximize both your charitable impact and tax benefits while avoiding costly mistakes.