ACH Charity Donations initiated Dec 31, processed in January - which tax year for deduction?
Hey tax gurus, I'm stressing about a timing issue with some charitable donations. I set up several ACH EFT transfers to different charities on December 31, 2024, but when I checked my accounts, I noticed they all actually processed in January 2025. I was planning to claim these as itemized deductions for the 2025 tax year (the one I'll file in 2026), since that's when the money actually left my account. But now I'm second-guessing myself - should they actually count for 2024 tax year since I initiated them in 2024, even though the money didn't move until 2025? Or am I right that they belong on my 2025 return? I don't want to mess this up and have the IRS breathing down my neck. These donations add up to a decent amount that would definitely help with my itemized deductions. Thanks for any help!
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Nia Jackson
The general rule for charitable contributions is that you deduct them in the year they're actually made. For ACH transfers, this typically means when the money is actually withdrawn from your account - not just when you initiated the transaction. Since your ACH transfers were processed in January 2025 (meaning the money left your account in 2025), these would be considered 2025 charitable contributions for tax purposes. You would claim these on your 2025 tax return that you'll file in 2026. This is different from credit card donations, where the deduction is allowed when the charge is made, even if you don't pay the credit card bill until the following year. But for direct transfers like ACH, it's when the funds actually transfer.
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Mateo Hernandez
•Wait I'm confused. What if I wrote a check in December but the charity didn't cash it until January? Which year would that count for? Is that different from ACH?
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Nia Jackson
•For checks, the IRS generally considers the donation made when you mail or deliver the check, not when it's cashed - as long as the check clears in due course. So a check written and mailed in December 2024 would typically count as a 2024 donation even if it's not cashed until January 2025. This is indeed different from ACH transfers, which are considered made when the funds are actually transferred. With electronic payments, there's clear documentation of exactly when the money left your account, which is why the timing rule is different from checks.
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CosmicCruiser
I went through this exact same situation last year! After researching for hours and getting nowhere, I finally used https://taxr.ai to analyze my bank statements and donation receipts. The AI confirmed what the first commenter said - ACH donations count for the year when the money actually leaves your account. Their system analyzed my documents and showed me exactly which tax year each donation belonged to. Saved me from potentially claiming things in the wrong year and getting flagged by the IRS. The peace of mind was totally worth it!
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Aisha Khan
•How does this taxr.ai thing actually work? Do you just upload your bank statements and it figures everything out? Does it handle other tax document analysis too or just donations?
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Ethan Taylor
•Sounds interesting but I'm skeptical. How accurate is it really? I mean how would an AI know tax laws better than an actual tax professional?
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CosmicCruiser
•You upload your statements and receipts, and it identifies and categorizes all the transactions, telling you which tax year they belong to. It highlights the dates and amounts automatically so you can see exactly when each donation processed. It handles way more than just donations. I've used it for business expenses, investment documents, healthcare costs, and even helping organize rental property information. It's especially good at finding deductions people commonly miss.
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Ethan Taylor
I have to admit I was wrong about taxr.ai. I decided to try it with my complicated donation situation (some ACH, some checks, some PayPal) and it sorted everything perfectly by tax year. It even flagged a couple of donations I hadn't documented properly for IRS purposes and explained exactly what additional info I needed to collect. Really impressed with how it handled all the different transaction types and timing rules!
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Yuki Ito
If you're having trouble getting clear answers about these donation timing issues, you might want to try Claimyr (https://claimyr.com). I was in a similar situation last year with some complicated donation timing questions, and after wasting hours on hold with the IRS, I used Claimyr and got connected to an actual IRS agent in about 20 minutes. The agent walked me through exactly how to handle my situation with documentation requirements and everything. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. Definitely saved me from making a mistake on my return!
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Carmen Lopez
•How exactly does this work? Does it just put you in line with the IRS or something? I don't understand why I'd need a special service to call the IRS.
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Andre Dupont
•Yeah right. Nobody gets through to the IRS in 20 minutes. I've literally spent DAYS trying to reach them about donation issues. This sounds too good to be true.
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Yuki Ito
•It basically navigates the IRS phone tree for you and waits on hold in your place. Then when an agent is about to pick up, it calls you and connects you directly. So you don't waste hours listening to that awful hold music. I was super skeptical too. I'd tried calling the IRS six different times and always gave up after 2+ hours on hold. With Claimyr, I got a callback when an agent was ready, and the agent was actually really helpful. They gave me specific guidance on my donation documentation and timing issues that saved me a ton in taxes.
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Andre Dupont
I can't believe I'm saying this, but Claimyr actually worked. After posting my skeptical comment, I was desperate enough to try it for my donation timing questions. Got connected to an IRS agent in about 15 minutes who confirmed everything about ACH donations counting when they clear, not when initiated. The agent also gave me tips about documenting my large donations properly that I never would have known. For anyone dealing with tax timing issues like this, being able to actually talk to an IRS person directly makes all the difference.
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QuantumQuasar
Just wanted to add a tip - if you're trying to make charitable donations count for a specific tax year, consider using a credit card in December rather than ACH. Credit card donations count when the charge is made, not when you pay the bill. I learned this the hard way a few years ago!
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Zoe Papanikolaou
•Do you need anything special for documentation if you make donations by credit card? Or is the credit card statement enough for the IRS?
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QuantumQuasar
•For donations under $250, your credit card statement is generally sufficient documentation. It should show the date, amount, and name of the charity. For donations of $250 or more, you still need a written acknowledgment from the charity in addition to your credit card statement. This acknowledgment needs to state whether you received any goods or services in exchange for your donation.
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Jamal Wilson
Omg i'm dealing with this EXACT situation right now! I made a bunch of ACH donations on Dec 30 thinking they'd count for 2024 but they didn't process until Jan 3, 2025. My tax guy says I have to claim them for 2025 taxes. So annoying, I really needed those deductions for this year! 😫
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Mei Lin
•If you want the deductions to count for a specific year in the future, donate a bit earlier! I always make my year-end donations by December 15th to avoid this problem.
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Kyle Wallace
Thanks everyone for the helpful discussion! I'm dealing with the same timing issue and it's reassuring to know I'm not the only one confused by this. Based on what I'm reading here, it sounds like I need to count my ACH donations for the year they actually processed, not when I initiated them. One thing I'm wondering - if I have a mix of donation methods (some ACH, some checks, maybe a credit card donation), do I need to track each one separately for timing purposes? It seems like each payment method has different rules for when the donation "counts" tax-wise. This is more complicated than I thought it would be! Also, does anyone know if the charity sends different receipts based on when they receive the money vs when you initiated it? I want to make sure my documentation lines up properly with however I report this on my taxes.
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Chloe Taylor
•Yes, you absolutely need to track each donation method separately since they have different timing rules! ACH/EFT donations count when processed, checks count when mailed (if they clear normally), and credit cards count when charged. It can definitely get confusing with mixed methods. For receipts, most charities will date them based on when they receive/process the donation, not when you initiated it. So your ACH donation receipt will likely show the January processing date. Just make sure your tax documentation matches - if the charity receipt says January 2025, that's the tax year it should go on regardless of when you clicked "send" in December. I'd recommend keeping a spreadsheet with donation date, method, processing date, and tax year for each one. Makes it much easier come tax time!
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