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New Charitable Deduction Rules
The
substantiation requirement for donations of cash, clothing, and household
items has significantly increased. In
other words, if you want the charitable contribution tax deduction, more
proof is required.
This
provision, within The Pension Protection Act of 2006, requires that in the
case of a charitable contribution of money, regardless of the amount, the
donor must maintain one of the following from the organization contributed
to:
·
cancelled
check
·
bank record
·
receipt
The
document must show:
·
name
of the donee organization
·
date
of the contribution
·
amount
of the contribution
According
to the IRS, a
log of contributions is no longer sufficient.
The
new law also limits charitable deductions for contributions of clothing
and household items. In
addition, the Act
reforms the giving away of clothes by specifying that no deduction is
allowed for charitable contributions of clothing and household items if
such items are not in good used condition or better.
What
does this mean for you? If you
are not currently obtaining the necessary receipts of your charitable
contributions, the time to start doing so is now.
For
complete details on deducting charitable contributions see the IRS
Publication #526 www.irs.gov/pub/irs-pdf/p526.pdf.
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