2007 Tax Changes

2007 Tax Law Changes

Tax Incentives Available Until December 31

United Way St. Croix Valley reminds people age 70 ½ and older that they have a one-time opportunity to take advantage of a tax incentive for IRA assets charitable contributions made by December 31, 2007.

This type of contribution may result in a significant income tax deduction. The gift can also count toward the Required Minimum Distribution (RMD). This can be an attractive option for taxpayers who don’t usually itemize deductions.

Most charities are eligible to receive qualified charitable distributions (QCDs). Consult a financial or tax advisor to determine if this option is right for you.

The IRS now requires donors to charitable organizations to substantiate every cash contribution they intend to deduct for tax purposes.

What's Needed?

Cash/check contributions:

A written acknowledgement from the charity showing the date and amount contributed

- or -

A bank record like a cancelled check, bank statement or credit card statement

Payroll deduction contributions:

A pay stub, W2 or other employer generated document showing the total amount withheld

-and-

A copy of a pledge card, paper form, or printout of an electronic message or form, initiated by the charity, describing the pledge and showing the charity's name

The above forms need to include the statement: "No goods or services were provided in exchange for this contribution." United Way's pledge card and online pledging form will contain this statement.

Donors should print and keep for their tax records.