Make sure charities give proof of a taxpayer's donation

A recent study shows that more Americans are loosening their purse strings and making charitable contributions to qualified organizations. However, tax professionals are urging individuals who plan to claim their donations to get the details in writing.

A recent Wall Street Journal post highlighted the case of a taxpayer who made a six-figure donation to a university, only to find the amount could not be deducted because there was no valid letter confirming the details. According to Internal Revenue Service guidelines, individuals who make a donation amounting to $250 or more must have a valid document from the charity organization that confirms the details, the Journal reports.

"If you don't have the correct paperwork, there's no way to fix the problem," Deloitte Tax director Laura Peebles told the Journal.

Documentation provided by the organization should include the amount of the donation, and a confirmation that no goods or services were received in exchange for the gift. If goods or services were received, those details must be documented as well. Individuals who are unsure of the rules relating to charitable contributions should consult their tax preparer prior to making a large donation.

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Posted To: Tax Ranger's Blog By: Tax Ranger On: Thursday, July 14, 2011
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