Does the IRS allow a certain amount of individual cash donations without a written receipt?

by Colleen S. Krcelich, CPA | Aug 30, 2018

I see postings all the time from people on social media asking for monetary help for just about anything. Most of the people asking are not registered 501(c)(3) organizations, and most of the people giving don't realize they will not receive a tax receipt for their helping donation. Doesn't the IRS allow so much to an individual in cash donations without a written receipt? Are there any laws that would recognize the practice as panhandling or some other illegality? I’m asking because I see so much of it occurring.

You are confusing donations and gifts. Donations are generally tax deductible if they are made to a charity – a 501(c)(3) – assuming you will itemize your deductions in 2018. You must have a receipt (and possibly an appraisal) to prove donations on your tax return. A taxpayer can gift up to $15,000 each to as many individuals as they want each year without having to file a gift tax return – but there is no deduction for these gifts on a federal tax return. So, when “donating” to a GoFundMe, the taxpayer is technically making a gift to a person.
However, when using sites such as “GoFundMe,” things get complicated. Here’s some general tax considerations, but if you are a person receiving gifts via GoFundMe, I suggest consulting with a CPA familiar with the situation to determine if the amount received is or is not taxable income.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Colleen S. Krcelich, CPA, is the owner of Business Support Solutions LLC in Allentown, Pa. 

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