Tax Tip of the Week- Proper Documentation Needed for Charitable Gifts Deduction

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Donations People like to help out by donating to various charities. Beginning in 2007, the IRS imposed tougher substantiation rules for charitable donations of cash. Some taxpayers are still getting used to the idea of getting back up information in order to take the tax deduction.

 

During the last year the IRS has come down hard on taxpayer with a large increase of audits – especially in El Paso. The IRS does not allow a deduction for a contribution of cash, a check or any other monetary gift unless the donor has maintained a record of the contribution (such as a bank statement) or written communication provided by the charity. The communication must show:

 

• The name of the charitable organization

• The date of the contribution

• The amount of the contribution.

 

Credit card statements and printouts of online donations will suffice for donations under $250. But a qualified written communication (receipt) from the charity is required for donations above $250.

 

Most charities already comply with the IRS’s rules but always check with them to make sure that they are tracking your donations.