Year-End Contributions: 2010 and 2011
It’s the season of giving and receiving, and the giving part isn’t limited to our family and friends. As our weather turns cooler and the year comes to an end, our thoughts shift to charity. Because many of the checks are written as the calendar is about to turn, determining what year to report your charitable contributions for tax purposes can be confusing. Knowing that my readers don’t want to bring on the ire of the IRS, I looked around for someone to ask since I get confused as well.
Fortunately I have a friend, Chuck Warman, who happens to know a lot about taxes. Chuck has worked for many decades (he’s old) as a CPA (he’s smart). So I asked him how to figure out whether a charitable contribution counted for 2010 or 2011. Here are some guidelines he gave me.
If you want your charitable contribution to count for 2010, you need to make sure that one of the following occurs:
• You write a check that is dated, sent, and postmarked in 2010. • You donate through payroll deduction from a paycheck dated in 2010. • You donate cash in 2010. • You authorize a credit card donation in 2010 (make sure you can document the authorization). If you donate using one of the ways listed above, they count for 2010 even if your charity doesn’t cash your check or deposit your donation until January.
Here are some scenarios that create a 2011 donation:
· If you write and date a check in December, but don’t deliver it in person until 2011, that donation counts for 2011, not 2010.
· If you write and date a check in December, but don’t get it in the mail in time for it to be postmarked in 2010, that donation counts for 2011, not 2010.
· If you put cash in an envelope fully intending on dropping it by the charity in 2010, but it doesn’t make it there until January, that donation counts for 2011, not 2010.
Now, even though mailing your donation on Friday, December 31, makes it legally a 2010 contribution, there is no way the charity is going to receive and deposit the check until January. Yes, the postmark on the envelope is December 31, but how are you going to prove it? Chuck recommends that when time is short, and you want to be absolutely certain that you get credit for your donation in 2010, either (1) hand deliver it and get a receipt, or (2) send it certified mail with return receipt requested.
Even though Chuck is old and wise, and I think I’m really smart, too, I always suggest that you talk with your own tax expert who can gather the facts and specifics of your particular situation before applying this or any other tax advice you read in this column (or really, the rest of the newspaper). You can’t ask Chuck, because he finally decided to retire.
That said, let’s not forget that Christmas isn’t about us exchanging presents. It’s not about a tree or a good meal. It’s not about singing carols or even about spending time with friends and families. Yes, all that goes on and creates wonderful times and memories. But Christmas is about celebrating the birth of Jesus, the Christ, who came to this earth to pay the penalty that was due for our sins.
He asks you to accept that gift. And he doesn’t require a receipt.
This article was published under the title "On giving, receiving, keeping IRS holly jolly"
in the Wichita Falls Times Record News on December 19, 2010.
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