When you donate money to a qualified charity at the end of the year, you can generally deduct the entire contribution.
Strategy: Stick to the letter of the law. In particular, be sure to comply with all the recordkeeping requirements in this area.
Here’s the whole story: Currently, no deduction is allowed for any contribution of cash, check or other monetary gift unless you can show a bank record or similar record or afrom the charity. The written communication must indicate:
- The amount of the contribution
- The date the contribution was made
- The name of the charitable organization.
Therefore, you can’t simply write off cash donations like amounts dropped into Salvation Army pots or the church plate. But contributions made via credit or debit card can be substantiated by your credit card or bank statement.
Under prior law, the tax law already required a written acknowledgment from a qualified charitable organization for charitable gifts of $250 or more. The acknowledgment must be obtained by the earlier of the date your tax return is filed or the due date of the return (plus any extensions). It should include the amount of cash or the check; a description of any noncash property that was contributed; and the value of any goods or services provided.
For a “quid pro quo contribution” (i.e., a contribution made at least partially in exchange for goods or services) exceeding $75, the charity must provide a “good faith estimate” of the goods and services received and the amount of payment exceeding the value of the benefit.
Tip: A written statement isn’t required if you receive token goods, minimal services or intangible religious benefits in return.
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