Bookmark This Page

Delicious Google Bookmarks Stumbleupon Digg BlinkList Blogmarks Facebook Ma.gnolia Reddit Twitter Yahoo My Web Livejournal

Receipts and Documentation Key For Charity Tax Write-Offs

Giving your donations to charities is not only a great thing to do in order to help others, but it can also help you when it comes time to file your taxes with the Internal Revenue Service. There are many rules and regulations governing what makes a tax exempt donation acceptable, but you can bet that when you do donate, you will see a difference when you file.

At one time, you could donate just about anything, whether it was goods or services to any charity and write it off when you file your taxes. Now, the rules are a little more stringent. Before, you could take any slip of paper with the amount your donated and use it for your taxes. If you donated money, you would simply write the name of the charity and the dollar amount. If you donated items or goods, such as clothing, then you would place a dollar amount on your donation to use at tax time. In the past, there was a lot of wiggle room when it came to using tax exempt donations. You really didn’t need a lot of official documentation. That $20 you slipped into the Salvation Army bucket was all you needed to do to use it for your taxes. That, however, has changed.

With new regulations in place, you will certainly need some sort of documentation and this especially applies to cash donations. Part of this is aimed at making sure people aren’t “fudging” on their tax exemptions. The other reason for these changes is to help people donated to real charitable organizations. Too many so-called charities were popping up over night and the answer to this was to make these charities more accountable. These rules are causing many people to skip giving smaller cash donations and instead give more money in larger sums a couple of times a year.

In addition, rules have also changed about how much you can give without documentation. At one time, as long as your donation was under $250, you could simply use a copy of your check or handwritten note as proof of your giving. That is not the case any more. The bottom line is that no matter how much you plan on giving, if you want to use your donation when you file your taxes, you better get a receipt. A hand written note simply won’t cut it anymore when it comes to file your taxes. This is the reason that many charities now send you a receipt in the mail, or offer you a receipt at the time of your donation drop off.

Another type of donation you need to be aware of is donations in the form of household items or other goods. It used to be that you could simply drop off items at your local charity and get a receipt for the value. Most of the time, you would set the value at what you thought the items were worth. The IRS would use that information without question. Now, those rules have also changed. If you donate your old laptop or a bag of clothing, then you need to seriously consider the value. In fact, if it is worth over $500, the law actually states that you need to have this item appraised to determine the monetary value. There are actually true stories about people who have donated large amounts of items, worth thousands of dollars, only to find that the IRS disagrees with the value of the items. If this happens, you are looking at a hefty fine from the IRS.

As you can see, making donations can certainly help you when it comes time to file your taxes with the IRS. It is your responsibility to use these donations and tax write offs carefully and make sure that you have all the necessary and official documentation. It is always better to get it in writing and hold on to it until you file your taxes.