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Pension Protection Act Effects on Donations
Posted By Jim On 11/13/2006 @ 1:18 pm In Personal Finance,Philanthropy | 2 Comments
The Pension Protection Act of 2006 has changed the rules a little bit when it comes to charitable donations of money or property. In the past, if your donation was under $250 then you didn’t need to keep a receipt. Now, after the Pension Protection Act, you will need to keep records of all of your cash donations – which means you’ll have to keep a receipt from the charity, a canceled check, or a credit card statement that shows you made the donation. As with all receipts, you don’t mail it with your documents but you must have them in case you’re audited. Every year we like to donate a little bit of money to charitable causes and this year we’ll probably do the same.
As for property, which is something I don’t really do outside of a few books and some older clothes, the rules have been adjusted slightly as well. Now, what you donate must be in “good” condition, though that isn’t spelled out. I think this is really just a crackdown on all the filers who donate ratty old stuff or who claim a lot of $50 donations just to get a few dollars back.
Personally, I keep a folder of my old tax returns and stick any necessary receipts in with them (plus they’re on record with the credit card company) so these changes don’t affect me, but they’re good to know about.
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