We are almost half-way through 2010 so it’s a good time to start gathering and organizing some of the tax records that will be required for preparing your income tax return next winter.  Of course many of your tax documents won’t be available until after the end of the year.  However, you can immediately organize and file acknowledgements and receipts from charitable contributions made this year that you plan to claim as an itemized deduction on your 2010 income tax return. 

There are specific rules that should be followed to satisfy the documentation requirements for charitable contributions.  The IRS says no charitable contribution deduction is allowed unless the taxpayer has either:

• Bank records to substantiate a contribution such as a cancelled check or account statement for cash contributions of less than $250, or
• Written acknowledgement from the charity documenting the amount and date of payment.

Furthermore, charitable contributions of $250 or more in any one day to any one organization must have written substantiation from the organization.  A cancelled check is not enough to support a charitable deduction of $250 or more. 

Although these are the basic rules, be aware that there are additional documentation requirements for larger noncash donations including appraisals and cost basis substantiation. 

Good document organization and retention makes the tax preparation process must more efficient and less costly in the long run.