Contributing to charity is an integral component of the American culture. One reason for charitable giving is the income tax benefit resulting from most donations. Individuals expecting to claim a charitable income tax deduction must be very careful to satisfy the sometimes complex rules behind the deduction.
In order for a taxpayer to benefit from the act of giving to a charity and take advantage of the tax savings associated with the contribution, a taxpayer must consider the charitable organization, the nature of the contribution and the documentation substantiating the contribution. The Internal Revenue Service (IRS) has prescribed guidelines that address these areas. Details underlying the guidelines are discussed in this Insight.