Year-end tax strategy: Audit-proof charitable donations — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Year-end tax strategy: Audit-proof charitable donations

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in Office Communication,Workplace Communication

A recent tax-law change requires you to substantiate deductions for all monetary gifts to charity—even the spare change you throw into a collection plate or holiday kettle.

Strategy: Maintain proper records. Do it right away instead of waiting until tax return time.

Example: Whenever possible, obtain and retain a bank statement, receipt or written communication from the charity when you make the donation. The written communication must show the charity’s name, the date of the contribution and the donation amount. As long as you keep these records, you’ll be able to withstand an IRS challenge.

Tip: If you charge a donation by credit card in 2008, you can claim a current deduction for the gift, even if you don’t actually pay off the amount until 2009.

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