Charity? Get a receipt

When they passed the collection plate in church, you should've put in a check.

Ditto for those bell-ringers outside the grocery store, sidewalk Santas and the kid who came to your door raising money for a school band trip.

If you just gave cash — and didn't get a detailed written receipt — you are out of luck trying to deduct those contributions on your 2007 taxes.

Tighter record-keeping requirements for smaller cash contributions went into effect in 2007, completing major changes in charitable contribution deduction rules that began with the 2006 tax year.

Cash donations must be backed up by "proper" records, such as a check, bank copy of the check, electronic funds transfer record, credit card or credit union statement, payroll stub or W-2 in the case of a payroll deduction. These must show the name of the charity, donation amount, and the date paid or transaction posting date. A written acknowledgment from the charity showing that information also will suffice.

Previously, for amounts under $250, a taxpayer's notes or personal check register reflecting the donations was sufficient. Now, those smaller contributions must be documented with authoritative records.

"People who were throwing cash into the collection plate at churches, unless they get a receipt, they're not going to be able to take a deduction," said Jeff Schnepper, MSN.com's "Money Central" tax expert and author of books on finance and taxation. "Instead of throwing in $10 cash, throw in a $10 check."

Check to see whether a church or charity offers automatic electronic funds transfer or credit and debit card payments as a way of satisfying the new documentation requirement.

You don't have to provide your check or other documentation to the Internal Revenue Service, just keep it on hand in case you're audited. And if the charity doesn't cash your check until 2008, it's still OK to include it as a 2007 contribution, as long as you mailed the check in 2007.

Only taxpayers who itemize can take the charitable contribution deduction. Here are other rules for charitable contributions:

—Household goods and clothing donated to charity must be in "good used condition or better" to be deductible. There's an exception: Taxpayers can claim a deduction of more than $500 for any single item, regardless of condition, as long as a qualified appraisal of the item is included with the tax return. File Form 8283, "Noncash Charitable Contributions."

—For any property donation of more than $500, you must also attach Form 8283 to your return.

—Taxpayers donating an item valued at more than $5,000 must have an appraiser sign Part III of Section B of Form 8283. In some cases the appraisal must be attached to the form.

—For all other household goods, the IRS says you should "get from the charity, if possible, a receipt that includes a description of the donated property." You can claim the item's fair market value, which is usually less than its purchase price.

—If you donated a vehicle valued at over $500, your tax deduction is generally limited to the sum the charity receives when it resells the vehicle — even if the vehicle's fair market value is higher. But you can deduct the fair market value if the charity checks Box 5a, 5b or 5c on Form 1098-C, indicating that it plans to use or improve the vehicle or give it to a needy person.

—For vehicles used in volunteer work, you can deduct either actual operating costs such as gas or oil, or claim a flat mileage rate of 14 cents per mile for the time you were engaged in the volunteer work.

—Be sure to subtract from the charitable contribution amount any benefit you get in return. An example: You pay $40 to attend a special showing of a movie to benefit a charity. If the regular price of the movie is $8 (probably more these days), your deductible contribution is $32.

—Older taxpayers who made a direct transfer of funds from their IRA to a qualifying charity, so as to exclude the IRA distribution from taxable income, can't claim that funds transfer as a charitable deduction.

Be aware that many organizations don't qualify for purposes of the charitable contribution deduction. Among them: political campaigns, political action committees, lobbying organizations, civic leagues, labor unions, chambers of commerce, sports clubs, homeowners' associations, groups operated for profit, social clubs or foreign governments. (However, you may be able to deduct some contributions, like union dues, elsewhere on the tax return.)

Check IRS Publication 78 to see if the organization is listed as a qualifying charity. There's an online "Search for Charities" tool on the IRS Web site at http://www.irs.gov. Also, churches, synagogues, temples, mosques and government agencies are eligible to receive deductible donations, even though they may not be listed in Publication 78.
For more information on charitable deductions, see IRS Publications 526, "Charitable Contributions," and 561, "Determining the Value of Donated Property."