Just because it's the right thing to do, it doesn't mean it's easy: Deducting contributions for tax purposes now demands more documentation.
Starting this year, the rules for deducting donations are a bit more stringent. First, charitable contributions now require documentation. Acceptable forms include cancelled checks, bank or credit card statements showing the funds transfer/payment, or written acknowledgement from the charity with the amount and date of the contribution. So, before you drop cash into the Salvation Army Santa’s bucket or into the collection plate at your house of worship, think about using a check if you want to take the deduction.
Also, as of August 17, 2006, deducting donated clothing and household goods is no longer allowed unless they are in "used or better" condition. While the IRS hasn't defined what that means, it definitely frowns on donating items of minimal value, like used undergarments. This doesn't apply to contributions of items valued at $500 or more if a qualified appraisal is done.
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