Do you know that if your church does not properly prepare donor contribution statements it can cost those who have made financial contributions to your church thousands of dollars?
Over the years we have repeatedly stressed to students enrolled and attending our trainings what must be on all contribution statements. Failing to do so can render donations not tax deductible, which has been a cause of shock and financial hardship to many donors.
Do you know when a donor lists donations made to your church as tax deductible, but the IRS later informs a donor that his or her contribution has been ruled not tax-deductible because the contribution statement is invalid, that donor has to pay penalties and taxes on the donation?
Does your church properly inform its members that for any donation of $250 or more they must wait to receive their contribution statement prior to filing their taxes? This is extremely important, because the IRS disallows the donations if the taxes are filed prior to receipt of a properly formatted contribution statement.
Members have been enraged and lost confidence in their churches’ administrative capabilities, and some have even left their churches because of such errors that resulted in them having to pay thousands of dollars in taxes and penalties on donations they made to their churches.
Start in December notifying members about their contribution statements:
Last day for donations for the calendar year is December 31. They must be received by that date or postmarked by that date to be included in the current calendar year
- Do not file taxes until contribution statement is received
- Notify donors how they will receive the statements (i.e, via mail or email, and on what date). NOTE: If your church has a policy that statements are made available in the church’s vestibule, you still need to ensure that you mail any statements that are not picked up.