PROVE IT OR LOSE IT! DOCUMENT CASH CONTRIBUTIONS OF $250 OR MORE
“Give a little. Help a lot!” We often see catchy slogans that encourage us to give more during the holidays which make us feel more generous. Donating does more than generate good. While giving back to the community, making donations are an excellent way to generate tax savings. However, as with everything in tax law, it is imperative to follow the rules. Otherwise, the Internal Revenue Service (IRS) can reject your entire donation.
To prevent the IRS from denying your cash contribution of $250 or more, you must have proper written documentation from the qualified organization. Written documentation must include: (1) the date of the gift, (2) the amount of cash, and (3) information on whether you received any goods or services in exchange for your gift.
In order for your donation to qualify for this year’s deduction, make sure you acquire the documentation by the time you file your tax return.
To determine whether or not this requirement applies to you, do not combine all your donations to a specific charity. For instance, if you give American Cancer Society $50 every month, each contribution is a separate contribution. In this event, the written documentation rule does not apply as it is not $250 or more. Even though you don’t exceed the threshold, it is encouraged that you keep good records and written documentations as it will only further substantiate proof of your contributions. Better safe than sorry. Keep good records!
Genalyn Reyes | 09/28/2016