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IRS wants more documentation for charitable donations

As a result of problems with people taking excessive deductions for charitable contributions, the rules for claiming a deduction are getting stricter.

As a result of problems with people taking excessive deductions for charitable contributions, the rules for claiming a deduction are getting stricter.

The Internal Revenue Service has strict rules about how to report and substantiate charitable contributions. If you don’t follow the rules, the IRS may disallow your deduction.

Charitable contributions can be deducted by itemizing your deduction on Schedule A of Form 1040. If you do not itemize your deduction on Schedule A, you cannot deduct your charitable contributions.

Rules that became effective for contributions made in years beginning after Aug. 17, 2006, the donor must comply with the record-keeping requirements, including a canceled check, credit card statement, record of payroll deduction or a written acknowledgment from the charity as evidence of the contribution.

Written records prepared by the donor, such as check registers or personal notations, are not sufficient to substantiate a charitable contribution. The IRS does not allow you to put cash in the offering plate, with no substantiation, and take a charitable contribution deduction.

To assure that charitable deductions can hold up to IRS scrutiny, taxpayers need to pay attention when assembling charitable donation information for their tax returns.

If you make a cash donation of less than $250, a canceled check, credit card statement, record of payroll deduction or a receipt from the charity showing its name, the amount and date of the contribution is sufficient documentation.

It is important to get receipts and keep records for your charitable contribution donations. You must have documentation for cash, check or other charitable contribution. The IRS may disallow donations without substantiation.

Generally, you can deduct the fair market value of property you donate to qualified organizations. See Publication 561 for determining the value of charitable contribution.

For contributions more than $250, including contributions of cash or property, you must obtain and have in your records a written acknowledgment from the charitable organization, indicating the amount of cash or a description of the property contributed.

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