Taking effect in 2007, the Pension Protection Act changes the tax laws for charitable donation. Under the new law, any tax payer wanting to claim their donation as a tax deduction must show a receipt from the charity, a canceled check, or credit card statement to prove their donation. As with most deductions, no tax deduction will be allowed if the taxpayer cannot provide any supporting documentation. Taxpayers will not need to mail in the receipts with their tax return, just make sure that you keep them with your copy of the return in the event that you should be so unlucky as to be audited by the IRS.
This new law modifies the rules for non-cash donations as well. Items donated, such as clothing, household goods, and cars, must be in good condition. However, the term 'good condition' has not been defined.
The Pension Protection Act permits taxpayers over 70.5 years of age to donate money to their favorite charity directly from IRA accounts. Since the distribution will not be included in taxable income, individuals will not be able to claim a tax deduction for the charitable contribution.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment