Tax Guru-Ker$tetter Letter

Friday, December 01, 2006

Donating via Paychecks

As mentioned previously, starting in 2007, the record-keeping requirements for being able to deduct charitable contributions are being tightened up. Some people donate to charities via having their employers withhold money from their paychecks and then send it on to the charity. Since the employee won’t have a canceled check for the actual charitable payment, there may be some confusion as to whether that person has proper documentation to be legally allowed to claim the contribution as a deduction on his/her tax return.

To the rescue, IRS has just announced what will suffice for proper records. It really isn’t hard.

For a charitable contribution made by payroll deduction, a pay stub, Form W-2, or other employer furnished document that sets forth the amount withheld for payment to a donee organization, along with a pledge card prepared by or at the direction of the donee organization, will be deemed to be a “written communication from the donee organization” that satisfies the requirements of § 170(f)(17).

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 12/01/2006 12:40:00 PM Send this post: