While we were out shopping, I put a $20 in the Salvation Army kettle in front of the store. I say we can take that as a deduction but my husband says no. Who is right?
P.S. I have a new digital camera riding on your answer.
Gosh. I hope your old digital camera is working just fine… The answer is that your husband is right.
The IRS changed a number of rules effective January 1, 2007, for charitable giving. One of the rules is that all charitable donations of cash (or cash equivalent), no matter what the amount, must be supported by written documentation. This means that checks and credit card sales are generally okay so long as you can clearly identify the donation portion. Cash is okay, too, but only if you can get a receipt.
Handing cash over to an organization without getting a receipt? Not deductible.
This isn’t to say that you shouldn’t do it. I gave my kids a couple of dollars to put in the red kettle the other day (and the bell ringer let them each give the bell a go, which they thought was awesome). If you’re inclined to support charitable causes like the Salvation Army and Alex’ Lemonade Stand that may ask for cash on the street, don’t let the lack of a tax deduction keep you from doing it. You might consider giving a dollar or two on the street and then going home and writing a check or making a donation online – that way, you get the immediate warm fuzzies for making a donation on the street AND you get the benefit of the tax deduction for your larger donation.
I had a similar question last year about making donations to churches for needy families – make sure you check it out.
Speaking of, the end of the tax year is rapidly approaching. You only have a few more weeks to make a donation to a qualified charitable organization in order to claim your federal tax deduction. Why not double your impact by telling us about your favorite charity? Leave a note in the comments at this prior post (click here) and the charity that you name may get an additional contribution.
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
Have a question? Ask the taxgirl!