Hopefully you have already been aware all year of the changes in donations and charitable contributions in regards to your taxes. This is a big year of transition; therefore if you haven’t been keeping adequate records, you may have lost an opportunity for a tax deduction.
Still, there is one month left of 2007 and many individuals give the most during the holidays. Therefore, it is worth mentioning some of these changes as we head into this season of giving.
The main change in regards to your taxes comes with the paperwork necessary to prove a valid donation. This is particularly important for cash contributions, which must now have documented proof of both the amount and the charity. In years past, the IRS would allow you to deduct up to $250 with little proof; now this “gift” no longer exists. For 2007 taxes, you must provide specific receipts for every cash gift you give to a charity… even the couple dollars you add to the church collection plate.
For non-cash contributions, like used clothing, furniture, cars and more, the IRS has also tightened its restrictions. You must have an authentic receipt or letter from the organization you donated goods to, including an itemized list of exactly what was donated. The items on this list must be in good to excellent condition and the value you claim must match current market prices for similar used goods.
Don’t let this hassle stop you from giving to the needy or taking the deductions. Many organizations rely on your generosity and have done their best to adjust to the new IRS demands. You will find receipts easier to come by as well as information on finding the correct value for your used goods. Goodwill provides a handy list of prices at www.goodwillpromo.org or you can also discuss details further with an accountant or by reviewing IRS Publication 526.
Not only do these organizations need your donations, you do deserve the tax deduction as reward. Take the time to always ask for an itemized receipt and save these with all your usual tax documents. It will be worth your time and effort.
Related Articles: