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Charity Navigator, America’s leading charity evaluator, offers the following tips to help donors maximize the tax benefits of their 2007 charitable endeavors. Document All Cash Donations You can no longer deduct the spare change dropped in a charity's collection bucket without the proper documentation. If you are audited, the IRS will only accept one of the following to substantiate a monetary gift: a canceled check, credit card statement, bank statement or a written acknowledgement from the charity (showing the charity's name, the date of the donation and the amount given). Donating online at Charity Navigator (through its partnership with Network for Good) helps you fulfill this requirement since all your giving records will be stored in one place enabling you to quickly obtain an annual record of your charitable giving for tax preparation. Monetary Gifts of $250 or More Require Additional Documentation If you contribute $250 or more, then you must prove to the IRS that you (a) made the donation and (b) you didn't receive anything in return for that donation. Therefore you’ll need a receipt from the charity that includes the following information: the charity’s name, the value of your gift, the date you made your donation and a statement verifying that you did not receive any goods or services in return for your gift. Be Careful When Valuing a Donated Vehicle Although a new law implemented in 2005 attempted to crack down on taxpayers who were overvaluing donated vehicles, the government reports that many taxpayers still inflate the value of such donations. As a result, the IRS continues to take a close look at such deductions. If you donated a car worth more than $500, then you can only deduct the amount the charity received from the sale of your car. You can use the receipt from the charity to substantiate your claim. Do not attempt to use the fair market value unless one of the following conditions apply: (1) instead of selling the vehicle, the charity keeps and uses it, (2) the charity makes improvements to the car before selling it, (3) your car is sold at a discounted price to a person with a low income, (4) or if the car is worth less than $500. New Rules in Effect for Donated Clothing and Household Items Not only do donations of junk (such as used socks) cost charities a lot of money each year to discard, but the IRS only permits deductions for noncash items in "good used condition or better.” The one exception to this rule is for any single clothing or household item worth more than $500. For these items you can claim a deduction, regardless of its condition, so long as you submit a qualified appraisal with your tax return. Also be sure to maintain an itemized receipt from the charity for all noncash gifts worth less than $500 to substantiate your claims in case of an audit. Previous Tax Rules Still Apply Must Itemize: You must itemize in order to take a charitable deduction. Must Give to a Qualified Charitable Organization: To determine if a charity qualifies, donors can consult Charity Navigator’s website which only includes 501(c) (3) public charities to which all donations are tax deductible. Donation Must Have Been Made in 2007: Donations can only be deducted on the return for the year in which they were made. Charity Navigator's ratings are accessible at no charge at www.charitynavigator.org, and catalog the financial health of over 5,000 of America's best-known charities. Charity Navigator analysts examine two broad areas of a charity’s financial health --- how responsibly it functions day to day as well as how well positioned it is to sustain its programs over time --- and assign an overall rating, ranging from zero to four stars. To help donors avoid becoming victims of mailing-list appeals, each charity's commitment to keeping donors' personal information confidential is assessed. The site is easily navigable by charity name, location or type of activity and features an expanded list of tax tips to help donors determine how much they can deduct and what types of contributions are deductible. About Charity Navigator: Charity Navigator is the largest charity evaluator in America and its website attracts more visitors than all other charity rating groups combined. The organization guides intelligent giving by evaluating the financial health of over 5,000 charities. Charity Navigator is a 501 (c)(3) organization that accepts no advertising or donations from the organizations it evaluates, ensuring unbiased evaluations. Charity Navigator, www.charitynavigator.org, can be reached directly by telephone at (201) 818-1288, or by mail at 1200 MacArthur Blvd, 2nd Floor, Mahwah, N.J., 07430. www.HealthNewsDigest.com Top of Page 
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