Charity's Tax Rewards

Charity is its own reward--but don't forget the tax benefits. As you start your tax planning for 2007, there are a couple of changes in the law you should be aware of:

If you're over 70 1/2, a new law allows you to make a contribution of up to $100,000 directly from your IRA. This law is limited to 2006 and 2007. There's no deduction, but the money will not be counted as taxpayer's income. This is good for social security recipients, whose benefits are not taxed until they reach a certain income level.

Another new law requires written documentation for all monetary donations, including cash, starting in 2007. From Charity Navigator: "In case of an audit, you must have a canceled check, credit card statement or a written acknowledgement from the charity (showing the charity's name, the date of the donation and the amount given)."

This new law will probably negatively affect churches and other charities that use donation buckets or canisters, as you now need a receipt to back up your deduction claims.

Give an appreciated stock held for over a year (instead of the stock's proceeds) and get double tax savings. Find out other ways it pays to be charitable.

If you are an employee at one of these companies, your gift will have twice the impact, thanks to their matching gift programs. Just fill out the form on the company website, or request one from HR.

Lastly, check up on your charity to make sure your hard-earned money is being well spent.

-Steve Adler