Charitable Contributions
As we approach the end of the year, the requests for charitable contributions come in daily. Making charitable donations is a great way to help lower your tax bill but, as always with the IRS, makes sure you do it properly. Since 2005, you have been required to maintain a receipt of your cash donations regardless of the amount of the donation. This receipt can be an actual letter or receipt from the organization (the absolute best method of proof), a cancelled check showing the name of the organization and the amount or a credit card receipt showing the same information. Your credit card statement may work but it must show the organization name, the amount and the date of the donation.
One other step you should take if you aren't completely familiar with the requesting organization, is to verify their non-profit status. Many times, I've had clients come in with letter receipts saying that a donation was made but upon further scrutiny have found that the "charitable organization" is not listed in the IRS database of authorized non-profits. To check out the status of a non-profit organization go to www.irs.gov/charities. On the left side of the screen you will see a link to "Search for Charities". Click this link and you can search for the charity by name, city and/or state. Please note that there is also a list of recent revocations and deletion and a list of suspensions. Check these lists carefully to ensure that you are making a deductible contribution to a valid charity.
If you have further questions about this, please contact Kathy and she will be happy to assist you. Happy Holidays!
One other step you should take if you aren't completely familiar with the requesting organization, is to verify their non-profit status. Many times, I've had clients come in with letter receipts saying that a donation was made but upon further scrutiny have found that the "charitable organization" is not listed in the IRS database of authorized non-profits. To check out the status of a non-profit organization go to www.irs.gov/charities. On the left side of the screen you will see a link to "Search for Charities". Click this link and you can search for the charity by name, city and/or state. Please note that there is also a list of recent revocations and deletion and a list of suspensions. Check these lists carefully to ensure that you are making a deductible contribution to a valid charity.
If you have further questions about this, please contact Kathy and she will be happy to assist you. Happy Holidays!
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