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Charitable Contributions Tax Deduction Proof Needed in 2007

If you have read much here at my site, you know I am a Christian and I believe in the 10-10-80 rule of investing. Simply put, it means you give 10% to God first, then 10% to savings (investing, retirement, etc) then you live on the remaining 80%. See my post about it to learn more.

This year, when you are filing your taxes for 2007, you need to be aware that the “proof” required for giving cash to a charitable organization has increased. We need to be sure we have this proof if asked. Your church or synagogue, needs to give you the correct document so we all stay out of trouble. I remember way back when, we didn’t need a lot of proof, but now we need more . Here are some of the changes to the rules for 2007 tax year.

The change affects those that give under the $250.00 level. Actually, this shouldn’t affect most people as you probably already give more than $250 to charity, I mean come on, that is nothing! 10% of $70,000 is $7000. But anyway, the IRS did tighten the proof to be any amount, instead of $250 or more. This will really change the way the offering is collected in churches. Be sure to sign up for the “envelope” system, if your church uses it. Cash put directly in the offering plate is not documented and you probably won’t be able to claim it.

The best proof is a letter from the charitable organization , on their letterhead, showing how much you gave, broken down by date. You may also use credit card receipts and canceled checks as proof. Just be sure you have one of these. You don’t need to submit this to the IRS with your tax return. Keep it with your records though, and should you need it, you’ll be fine.

For further information see IRS Publication 526, Charitable Contributions.

As with all my financial or tax advice, I am not advising as a professional and I give no professional legal or tax advice. If you need professional advice, please get that from a CPA or attorney.

If you want to contact me you can email me at mackgoodman@gmail.com

Please feel free to leave a comment.

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