Good News This Christmas for Big-hearted People
Christmas is a popular time for those fortunate enough to have a little extra to give to those who don’t. It’s an especially good time for this year, 2021. This year only, you can deduct charitable contributions up to 100% of your income if you itemize. The deduction for these contributions are subject to limits, of course, the main limit being that they are cash contributions made to qualifying charitable organizations.
If you are going to be making contributions equal to your taxable income, expect the IRS to check on you. Make sure you follow the IRS recordkeeping requirements for all contributions:
1) Make your gift to a qualifying charitable organization. There is a list on the IRS website.
2) Obtain and keep an acknowledgement letter from the charitable organization that includes the amount of cash given and whether you received any goods and services for the contribution and the value of such goods and services.
3) Either the acknowledgement must show the date of the contribution, or you must keep other documentation proving the date, such as bank statements or a cancelled check.