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Cash in tax chips on monetary gifts

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in Small Business Tax,Small Business Tax Deduction Strategies

If you give cash or a cash-equivalent gift to a qualified charity at year-end, you can generally deduct the entire amount of the donation.  

Strategy: Make sure to comply with all the recordkeeping requirements. The IRS is a stickler in this area.

Although recent tax-law changes have made it tougher to substantiate monetary contributions, it’s usually worth the effort.  

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 credit card bill (for donations under $250) or a written acknowledgment from the charity (for donations of $250 or more). The written receipt acknowledgment must indicate:

  • The amount of the contribution
  • The date the contribution was made
  • The name of the charitable organization
  • The value of any benefits that you received (such as tickets to a banquet).

Therefore, you can’t simply write off cash giveaways like you could in the not-so-distant past. But contributions of less than $250 made via checks or a credit or debit card can be substantiated by your cancelled check, bank statement or credit card statement.

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