Hello Sir or Madam,

I have question regarding donations to newly formed nonprofit organizations.

Let us say that a organization forms in Year 1 and immediately applies for 501c(3) status. Its application is approved, but not until year 2. I understand that typically, donations become tax deductible retroactively once 501c(3) status is approved. Would this mean that if an individual donated in Year 1, they would wait until Year 2 to make the deduction for the donation made in Year 1?

Let us say that a organization forms in Year 1 and immediately applies for 501c(3) status. Its application is approved, but not until year 2. I understand that typically, donations become tax deductible retroactively once 501c(3) status is approved. Would this mean that if an individual donated in Year 1, they would wait until Year 2 to make the deduction for the donation made in Year 1?======>>>>>> Your contribution won't be tax deductible until the organization is approved and receives its determination letter from the IRS. The IRS exempts the organization retroactive to the date it was legally organized, but understand that only if the organization is approved, will your contribution be tax deductible.while an application is pending, the organization can treat itself as exempt from federal income tax under section 501(c)(3). However, contributors to the organization do not have advance assurance of deductibility because the organization’s exemption is pending. If the organization ultimately qualifies for exemption for the period in which the contribution is made, the contribution will be tax-deductible by the donor. Alternatively, if the organization ultimately does not qualify for exemption, then the contribution will not be tax deductible.. An organization that files an application after this deadline may be recognized as tax-exempt from the date of the application; it may also request exemption effective back to the date of creation. You cannot claim it next year, however. You can only claim the deduction in the year that you made it You need to maintain an acceptable written record of the donation, including the name of the organization, date and amount

Thank you for your response. If it is the case that one can only claim the deduction in the year it is made, it seems to me then that smaller donations to a start-up are often de facto non-deductible. Aside from the risk of the application being denied, there is the fact that the average time for approval is now about 9 months I believe. This means there is a very good chance that approval won't come until the next year after one has done their taxes. A deduction even of a few hundreds of dollars probably wouldn't justify the expense and effort needed to do an amendment. Does that sound about right?

A deduction even of a few hundreds of dollars probably wouldn't justify the expense and effort needed to do an amendment. Does that sound about right?===========>>>>>>>>basically,you need to file your 1040x aslongas you make a mistake in reporting your total income;e rror in figuring deductions and/or credits. Whenever you make changes to a form or schedule that you filed with your original return, you must prepare a new one and attach it to the 1040X.

Your state tax liability may be affected by a change made on your federal return. you should file the amended return soon as possible. If you're owed, you'll get that money faster, of course. And if you owe, filing an amended return right away reduces how much you'll pay in penalty interest.