Donors that give to 501c3 nonprofit organizations can deduct up to 50 to 60% of their adjusted gross income (AGI). For that to happen, they file charitable donation tax forms with the IRS, often including the tax receipts they receive from charities. Tax receipts are a vital communication piece your organization must send to all…
Donors that give to 501c3 nonprofit organizations can deduct up to 50 to 60% of their adjusted gross income (AGI). For that to happen, they file charitable donation tax forms with the IRS, often including the tax receipts they receive from charities.
Tax receipts are a vital communication piece your organization must send to all donors.
Nonprofits usually acknowledge donors’ gifts within 48 hours. But those organizations that send their donors’ year-end tax receipts make filing their taxes even easier. This support helps build and strengthen donors’ connections with your organization.
In this article, we’ll break down the various tax forms your donors will require and how Donorbox can help your nonprofit provide these receipts.
The IRS requires donors that donated at least $250 must file include bank records or written receipts from the nonprofit. Donors must receive these receipts by the time they file their taxes or the due date of their return.
Each donation type requires different information. So, it’s vital organizations understand what they need to provide for online donations, in-kind gifts, event tickets, and more.
Receipts for cash donations must include the amount of the gift. Nonprofits will often provide donors with tax receipts or written acknowledgments after receiving their gifts.
Donors can use the information from these receipts to fill out Schedule A on Form 1040 or 1040-SR. Remember, donors who deduct more than $250 must also include these receipts when they file.
The IRS treats online donations the same as cash donations. Nonprofits must send receipts to donors who give more than $250. Donors will use Form 1040 to claim tax deductions for these donations.
501c3 nonprofits will give all online donors a donation receipt regardless of the donation amount. Nonprofit receipts given to donors for donations must state that no goods or services were provided in exchange for their gifts.
Donors can also deduct the cost of tickets to a gala or auction items they purchased if those items are valued at more than the donor paid. In these cases, nonprofits will provide donors with a description and good faith estimate of the value of goods and services donors receive.
Donorbox makes it easy to send automated, highly-customized donation receipts to donors. Your nonprofit can also send year-end tax receipts to donors. These are also customizable and include an attached PDF that highlights the total giving of the donor.
With Donorbox, your event ticket purchasers also receive automated ticket receipts including the tax-deductibility of their tickets and other vital information. We’ll discuss the steps and more later in this article.
Donors that give in-kind or non-cash gifts can also deduct their contributions from their taxes.
Non-cash may include –
Donors donating a non-cash item or group of non-cash items valued over $500 must file Form 8283 with their taxes.
When sending tax receipts for these contributions, nonprofits must remember not to assign a value. Donors are responsible for coming up with the fair market value of their gift, which is the amount someone would be willing to pay them for the items or services.
If a nonprofit receives property or the ability to use the property for free, they must also acknowledge this non-cash gift, but the process is slightly more complicated. The donor must submit Section B on Form 8283 and an authorized person from the nonprofit will sign this form and provide a written acknowledgment.
Sending tax receipts to your donors so that they can file their tax forms on time can be a time-consuming process. Not when you’re fundraising with Donorbox!
Donorbox makes it easy to automate your donation tax receipts and event ticket receipts for all donors. You can also easily send year-end tax receipts to selected or all donors from the tool.
Nonprofits provide donors with donation receipts after donating to their organizations. These receipts are should be customized to the donor, event, or campaign.
Donorbox makes it easy with simple and quick steps on its dashboard.
Login to your Donorbox account. Go to the “Fundraise” section on the Donorbox dashboard and click “Campaigns”. Now select the campaign you would want to customize your receipt for.
Click the “Edit” icon next to the campaign name.
Scroll down to “Additional Settings” and click the “Edit” icon next to “Receipt Email”.
Finally, customize the donation receipt to include your ideal content and subject line. You’ll also have the ability to test your receipt emails from here.
When you’re done, click “Update” at the bottom of the page! Now, rest assured that your donors will receive these tax receipts upon every donation they make.
Create Customized & Automated Donation Receipts
Bonus – Here’s a short video tutorial that will help you get started with these steps right away!
After your busy giving season, when it’s time to send donors their year-end tax receipts, Donorbox will make it hassle-free for you!
On your Donorbox dashboard, go to the “Engage” section and click “Receipts”.
From the 3 available tabs, select “Yearly Receipts” and click on “Settings” to edit your receipts.
Donors will receive an email and an attached PDF file including their total donation details.
You can customize your email subject line and content by clicking “Variables” and typing personalized messages to help build trust with donors.
When changing PDF settings, nonprofits can choose specific fiscal year periods and edit the thank-you message to be added to the PDF.
Finally, come back to the Yearly Receipts tab, select the donor records (all or a few), and click the “Send selected” button at the bottom.
Send Year-End Tax Receipts to Donors!
Bonus – We have a detailed step-by-step guide to walk you through this process. Donorbox Library also has a free template you can use while customizing your year-end receipt.
When it comes to filing their tax returns, donors would also want to add any tax deductions applicable for tickets bought for your nonprofit events.
Donorbox makes that happen quite swiftly – all donors purchasing tickets will automatically receive tax receipts including the digital copy of the tickets in their inboxes.
It needs no work from your end. Donorbox takes care of the whole process.
Here’s what it will look like –
New to Donorbox? No worries – it takes just 4 simple steps to start fundraising on our platform. Read this guide or watch this tutorial to begin your journey with us!
Charitable donation tax receipts are vital for donors and charities and can be an excellent way to strengthen relationships with donors. After all, who doesn’t appreciate it when someone makes filing their taxes easier?
Nonprofits that take the time to send year-end receipts to their donors in January will be doubly appreciated since donors will receive these necessary receipts far ahead of their tax deadlines.
Donorbox is there to help you at every step of this process! Customize our receipts to your liking and win your donors’ hearts.
But we have more to offer – learn about our range of powerful yet simple fundraising and donor management tools on the website. From Recurring Donations to Events to Memberships to Crowdfunding to Peer-to-Peer, and more, there are endless ways to amp up your fundraising with Donorbox!
Learn more about tax receipts, nonprofit tax returns, thank-yous, and more at the Donorbox Nonprofit Blog. Subscribe to our monthly newsletter to receive a collection of our best resources directly in your inbox.
Kristine Ensor is a freelance writer with over a decade of experience working with local and international nonprofits. As a nonprofit professional she has specialized in fundraising, marketing, event planning, volunteer management, and board development.
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Kristine Ensor