New charity tax laws for 2007?

Question

Do I understand the new charity tax law correctly. Is some sort of receipt required for ALL cash donations? I could understand there being a requirement for amounts of $250 or more but what about those donations to the holiday bell-ringers, church offerings; especially when you give a few dollars to your kids to put in the offering?
I keep track using a finanial program such as Quiken; but is this no longer accepted.
Do you give them a check, do you put it in an envelope with your name and address
on it and expect a reciept at a later time?

The reason I am concerned about this is because I usually give about %15 of my income during the year and not all of it is by check.

Any clarification and help would greatly be appreciated.

Dan

Answer 1

I agree. Cancelled checks are fine.

It will make things more challenging, but you'll have to plan for it. The choices will be to
*give to something without a receipt (because you're very generous)
*donate to only those where you can get the supporting documentation or modify your former cash givings to ALWAYS include a check
* Play the risk game. As far as I know, the documentation you need to get/keep has changed, but the form and how you report your contributions hasn't. Unless you were audited, the IRS wouldn't be able to distinguish.

Answer 2

Dan-It sounds like you've pretty much hit the nail on the head. In August 2006, Congress tightened up the substantiation requirements of charitable giving. So, yes, you need to obtain a receipt (or copy of a cancelled check, but a receipt is better) for ANY donation-cash or otherwise, regardless of the amount. Isn't that nice for all of these struggling charities? Anyway, stop using cash as a means of donation unless you've ascertained that the charity will give you a receipt. For instance, my church uses numbered envelopes and provides me with a receipt of donations after the end of the year, whether or not I've inserted cash or a check in the envelope. Again, I advise all of my tax clients to use checks or credit cards (yes, some organizations will take credit cards!). When donating goods, keep a full, detailed list of what was donated, who received it, when it was purchased (and at what cost, if you can remember), and the estimated used value. This means no dumping bags of stuff into the Salvation Army bins sitting around. You'll need to go to the charity and get a receipt. Gee, it's getting harder and harder to be a nice guy, isn't it?

Answer 3

First congratulations on your generousness. It is enviable.
The new tax law is setup to rein in rampant fraud. The government will expect receipts on charitiable giving this year. Canceled Checks are acceptable backup receipts. Forget about claiming cash henceforth.