Strict Documentation Rules for Charitable Contributions

Do you have plans of making a cash contribution to your favorite charity or donating some items that are sitting in your garage or basement?  If so, make sure that you are aware of the new requirements that apply to charitable contributions.

Charitable contributions can be tax-deductible; however, you must have the proper records to support your deduction since verification requirements have become very strict.

To deduct a charitable cash donation, regardless of the amount, you must have a bank record or a written communication from the charity showing the name of the charity and the date and amount of the contribution.  Acceptable bank records would include canceled checks or bank or credit union statements containing the name of the charity, the date and the amount of the contribution.

Under the prior more liberal rules, records such as personal bank registers, diaries or notes made around the time of the donation could often be used as evidence of cash donations. Personal records mentioned above are no longer sufficient.

Here are some additional tips to help you deduct your charitable contributions on your 2008 federal tax return.

• Charitable contributions are deductible only if Form 1040 is used to itemize deductions.

• Contributions must be made to a qualified organization.

• Used clothing and household items such as furniture, linens and appliances must be in good used condition.

• Vehicle donations are subject to special rules.

• To deduct charitable contributions of items (non-cash) valued at $250 or more, you must have a written acknowledgment from the qualified organization.

• To deduct charitable contributions of items (non-cash) valued at $500 or more, you must have a written acknowledgment from the qualified organization and you must complete and attach a special IRS form to your tax return. 

• For charitable contributions of items (non-cash) valued at $5,000 or more, the verification requirements become very strict and will depend on what is being contributed.  Call this office before completing the gift for quidence.

• Before making a vehicle contribution that is valued over $500, contact our office to determine what documentation is required to support this deduction. 

If you have any questions regarding charitable contributions, please call this office.  

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