Undoubtedly, the deduction for charitable donations is one of the biggest write-offs on your personal tax return. That’s why the IRS continues to scrutinize deductions claimed by high-income taxpayers.
Strategy: Stick to the strict letter of the law. In particular, make sure you comply with all the record-keeping requirements in this area.
Be aware that recent tax law changes impose tough substantiation rules on cash and cash-equivalent donations. Now, a new ruling shows that the IRS truly means business.
Here’s the whole story: Effective for contributions in tax years beginning after Aug. 17, 2006, no deduction is allowed for any contribution of cash, check or other monetary gift unless you can show a bank record orfrom the charity. The written communication must indicate:
- The amount of the contribution
- The date you made the contribution
- The name of the charitable organization.
Therefore, you can’t...(register to read more)