@Anastasia1975 wrote:
Wow. It looks like the non profit organization that I own will be writing lot of letters to me, as the the “contributions” (vet bills, food for the rescue cats, medicine for the rescue cats, etc.,) that I have to make in order to keep it running exceed $250 every single time, well over hundreds of times in one year. I was really hoping that I could tally them all together and write one letter for that one totaled amount. Thank you for the response, Ernie.
Regards,
Anastasia
I really want you to see an accountant. While it is legal to deduct contributions you make to your own charity, it raises the specter of self-dealing, and that can be a tax offense and sometimes even a crime. For example, it's generally ok to claim a deduction for vet bills you pay, but it might be a problem if the vet is a family member.
You should really have someone else sign your acknowledgments, someone who is independent and can vouch that you actually contributed something to the organization. Otherwise, if you are signing letters to yourself, the IRS could feel that's a bit dodgy.
Can you donate cash to the organization and then get a bank card in the name of the organization to pay bills? That would be cleaner, although you still need someone else to sign your letters.
The organization does not have to issue an acknowledgment letter for every donation, provided they have sufficient internal records that a single letter at the end of the year can be reliable and accurate, and not just a guess or from memory. The letter will not typically attest to the value of the gift, you must prove the value from your own records. But the letter needs to be fairly specific as to the items donated or the cost paid. For example, if you make 10 trips to buy pet food, you need your own receipt that you bought pet food to prove the amount. You need the letter from the organization to prove you donated the pet food to the organization and didn't just use it for personal use. A single letter at the end of the year would be enough if it included a list, table or spreadsheet summarizing your gifts throughout the year -- as long as the charity kept good enough internal records that the IRS would believe the letter is accurate and reliable. And with a related charity, it would really be good to have someone else from the organization sign the letter. (For example, when I was a church treasurer, and I got reimbursed for expenses, I always had someone else sign the check.)
This is what the IRS says,
Out-of-Pocket Expenses
If you give services to a qualified organization and have unreimbursed out-of-pocket expenses, considered separately, of $250 or more (for example, you pay $250 for an airline ticket to attend a convention of a qualified organization as a chosen representative), related to those services, the following two rules apply.
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You must have adequate records to prove the amount of the expenses.
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You must get an acknowledgment from the qualified organization that contains:
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A description of the services you provided,
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A statement of whether or not the organization provided you any goods or services to reimburse you for the expenses you incurred,
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A description and a good faith estimate of the value of any goods or services (other than intangible religious benefits) provided to reimburse you, and
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A statement that the only benefit you received was an intangible religious benefit, if that was the case. The acknowledgment doesn't need to describe or estimate the value of an intangible religious benefit (defined earlier under Acknowledgment).
You must get the acknowledgment on or before the earlier of:
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The date you file your return for the year you make the contribution, or
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The due date, including extensions, for filing the return.
