Cash Contributions

With the passing of The Pension Protection Act of 2006 in August the way we handle Charitable Contributions has changed. This article is going to deal only with Cash Contributions.

Due to this law, cash contributions made must now be substantiated regardless of the amount given. This is a big change. In times past there was a threshold for these types of donations where you did not have to substantiate them. Now even if you put change in the Salvation Army pot or five dollars in the plate at church it is not deductible without Substantiation.

What does this mean? Substantiation is done through receiving a receipt from the charity with their name, the amount given, and the date of the Donation. An alternative to this is a bank record. If you always donate by check and the donation is less than $250.00 then you can substantiate your donation in this way. Of course the basic rules still apply. The donation must be to a qualifying organization and you cannot receive a benefit for the donation. Buying cookies is not a charitable donation.

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