Donating to Charity? Get a Receipt!

Starting with the 2007 tax year, you'll need receipts, canceled checks, and other records to substantiate any donations to charity. For small cash donations under $250, your canceled check, credit card statement or payroll stub showing an automatic deduction will be sufficient. For cash gifts of $250 or more, you'll also need a written acknowledgment from the charitable organization.

The rules have gotten tougher for non-cash donations too. Gifts of clothes, household items, cars, and other property must be in "good condition" or better. If it's not in at least good condition, the deduction is not allowed. As for me, I'm thinking about taking pictures of all the clothes I am taking to Goodwill just in case the IRS needs proof they are in good condition.