North Charleston, SC (PRWEB) August 22, 2007
If you are planning to make charitable contributions in 2007, you should know that new rules are in place regarding these contributions.
Jack Grooms, a Licensed Taxpayer Representative for JK Harris and Company, the nation's largest tax resolution firm explains: "If you want to deduct the donation of items over $250, you must get a receipt from the charity to acknowledge your donation. The same rule applies for cash donations."
Grooms goes on to say, "In years past, there have been problems with questionable donations and abuse of the donation rules. Vehicles that were worthless could be written off for their National Automobile Dealer Association (N.A.D.A.) or 'Blue book' value, under past rules. Generally, taxpayers can only deduct the amount that they (or the charity) pay for the vehicle. Donations of household items were overvalued and written off for the taxpayer's benefit."
Beginning January 1, 2007, rules took effect to change tax treatment of donations to charity.
According to the IRS, taxpayers must have proper records to document donations. Bank registers, diaries, or notes annotating donations are no longer acceptable. Taxpayers making charitable contributions must have a bank record or a written communication from the charity documenting the name of the charity, the date and the amount of the contribution.
The IRS gives the following guidelines to help you deduct your charitable contributions on your 2007 federal tax return.
- Charitable contributions are deductible only if you itemize deductions using Form 1040.
- Contributions must be made to a qualified organization.
- Used clothing and household items such as furniture, linens, and appliances must be in good condition.
- Vehicle donations are subject to special rules.
- To deduct charitable contributions of items valued at $250 or more you must have a written acknowledgement from the qualified organization.
- To deduct charitable contributions of items valued at over $500 or more, you must complete a Form 8283, Noncash Charitable Contributions, and attach the form to your return.
"For every taxpayer out there, if you haven't been following these guidelines already, you need to make sure you do when you file your 2007 tax return," added Grooms.
More information is available on the IRS' website at http://www.irs.gov. A good resource regarding these changes is IRS Publication 526, Charitable Contributions, found on the website or by calling 800-TAX-FORM (800-829-3676).
About JK Harris:
JK Harris & Company, LLC, (http://www.jkharris.com) based in North Charleston, S.C., is the nation's largest tax resolution firm and has served over 200,000 customers since its founding in 1997 by John K. Harris. JK Harris consultants are available to meet with consumers in over 450 locations nationwide by appointment only. The company also provides services for consumer and commercial debt, student loan debt, investment fraud, financial planning, tax return preparation, and audit representation.