Some donations that are made to charities in California require proof just as at the federal level. There are a few differences in when and how to provide this proof on your federal and state tax returns.
Charitable contributions limits
California has a lower charitable donations limit than the IRS. On your federal tax return, you can make up to 60% of your adjusted gross income (AGI) in cash contributions. California allows up to 50% of your adjusted gross income as cash contributions.
If you receive a benefit for a charitable contribution, such as a dinner, then California subtracts the value of the dinner. Examples of charitable events that often involve deductions are banquets, charity balls, sporting events and theatrical performances.
California requires written acknowledgment of donations of $250 and above from the recipient of your donation. The recipient needs to include the organization’s name, the donation amount, a description and estimated value of the goods or services of the donation and a description of any non-cash contribution. If the recipient didn’t provide goods or services in exchange for the donation, then they need to clearly state this as well.
Proof of charitable contributions for federal taxes
The IRS requires proof of charitable contributions on cash donations of $250 and above. For non-cash donations, you’ll need to provide proof of donations of $500 and above. Non-cash charitable contributions over $5,000 need to have an expert appraisal. Written statements from the recipient, bank account statements and payroll deduction records could count as proof. For contributions of $250 or more, the charity must specify in their written statement whether they gave you goods or services in exchange for the donation.
Collect proof of your charitable contributions as you make them to reduce your stress once it comes time to file your taxes. California has slightly different rules than the federal government surrounding how much you can deduct. Thorough written statements from the recipient are acceptable proof for both your federal and California taxes.