Sunday, July 6, 2008

Charitable Contributions

Charity, as I hope everyone remembers, begins with a tax deduction. If you didn't have the cash to contribute in 2007, I hope you charged it. And, likewise, if you don't have the cash when it comes time to contribute in 2008, go ahead and charge it. The deduction is allowed in the year of the charge, not when you actually pay the bill.
Get a receipt from the charity to which you made a donation, and, if you're still worried about documentation, get the credit card company to send you their record of the transaction.
Now, let's say you emptied your closets and gave everything to Goodwill or a similar charity. The value of your donated items -- clothes, furniture, whatever -- is deductible. Get a written receipt. With noncash charitable contributions, the rule is simple: No receipt means no deduction if you get audited. Clothes and household goods must be in good or better condition to get the deduction.
If you've already dumped your old clothes in a Salvation Army box and walked away without a receipt, take the deduction anyway. You've legitimately made the contribution. You just may not be able to prove it in an audit. Starting with 2007 returns, the law requires a receipt or some sort of written confirmation for all charitable donations. Feel lucky? Play the audit lottery. You're still an honest person.

If you can, reconstruct as much as you can the list of items you donated and then figure out their market value. The easiest way is to go to a thrift store and check prices there.
And then, of course, when you make the donation, get that receipt.

7 comments:

Raj said...

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darrell said...
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darrell said...
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Jensen said...

There are certainly a lot of details like that to take into consideration. That’s a great point to bring up. I offer the thoughts above as general inspiration but clearly there are questions like the one you bring up where the most important thing will be working in honest good faith.



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