In early August, Congress passed a major new law on pension plans. Buried in the fine print were some unexpected tax provisions. These could affect your ability to claim a deduction for certain kinds of charitable contributions.
If you itemize your deductions for charitable contributions, be aware of two changes:
1)
New rules apply to any contributions you make by cash or check, regardless of the amount.
Starting in 2007, you’ll need either a formal receipt from the charity, or evidence such as a cancelled check or an entry in your bank records. The receipt or your bank records must show the date, amount, and name of the charity. Previously, for amounts up to $250, you could rely on your own written records provided they met certain standards.
2) Also, new rules govern donations of used clothing or household items.
Now you can claim a deduction only if the items are in “good” condition. Unfortunately, the new law doesn’t define what is meant by “good.”
To back up your deduction, you might want to snap a photograph of the items using your digital camera or cell phone camera. Print out the picture and keep it with your receipt.
If you think these changes might affect you, please contact our office. We’ll be happy to provide more information.
Questions for our Financial Expert?
E-Mail us at:
finance@ClevelandSeniors.Com
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