It’s that time of year when churches are putting together tax receipts for their donors. You should honor all of your donors by providing receipts for their donations so they can receive the IRS tax benefit of giving to a charitable organization.
Donors are required to show proof of their donations to the IRS in order to gain the benefit of the tax deduction. Canceled checks are acceptable to the IRS for individual donations under $250. Even if the donor gives fifty-two $50 checks, their canceled check are sufficient since each one was less than $250. However, for any individual gifts greater than $250, more substantial proof such as a receipt from the organization, is required. The best way you can assist your donors is to provide a receipt detailing each of their donations regardless of size.
Your receipt should include the donors name and whether the donor received any compensation in exchange for their donation. If they received any tangible good or service in exchange for their donation, the value of what they received must be deducted from the donation amount.
Most popular database programs can automatically generate year end statements. Check with your database company if you are unsure how to access this feature.
Information in this post was gathered from the Church & Clergy Tax Guide, an extremely valuable resource for church plants.
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