As the calendar flips to November, it's a good reminder of the many tax details that churches must track, especially on behalf of those who faithfully give to the church throughout the year. Churches must properly document donor contributions, which includes a statement on receipts regarding whether any goods or services were provided in consideration for the contributions.
To avoid jeopardizing the tax deductibility of charitable contributions, churches also should advise donors at the end of 2012 not to file their 2012 income tax returns until they have received a written acknowledgement of their contributions from the church. This communication should be in writing. To illustrate, the following statement could be placed in the church bulletin or newsletter during the last few weeks of 2012, or included in a letter to all donors:
IMPORTANT NOTICE: To ensure the deductibility of your church contributions, do not file your 2012 income tax return until you have received a written acknowledgment of your contributions from the church. Some of your contributions may not be tax-deductible if you file your tax return before receiving a written acknowledgement of your contributions from the church.
Keep your congregation informed about the rules for substantiating charitable contributions by ordering the2013 Charitable Contributions Bulletin Insertsby Richard Hammar. The insert is designed as a one-page summary explaining the rules of most importance to church members and can fit easily in church bulletins, newsletters, or contribution statements. The inserts are available in quantities of 100 or can be purchased for electronic download. Call 1-800-222-1840 or visit YourChurchResources.comto order.
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