Question

Jim makes cash contributions of less than $250 to a qualified charitable organization. What type of record must he maintain in order to deduct the contribution?

Answer 1

Answer: he'll need to keep a record of the donation.

Explanation: The key thing here is to have either a bank record (like a canceled check or credit card statement) or a written communication from the charity acknowledging the donation.

In simpler terms, Jim should hang on to something that shows he coughed up some cash for a good cause – whether it's a receipt from the charity or a bank statement with the transaction.

Answer 2

Jim must have a bank record or written communication from the charity with the organization's name, date, and contribution amount to deduct cash donations under $250 for tax purposes. Payroll deductions require a pay stub or W-2 along with a pledge card.

Step-by-step explanation:

Jim must maintain a bank record or a written communication from the qualified charitable organization containing the name of the organization, the date of the contribution, and the amount of the contribution in order to deduct his cash contributions of less than $250. If the contribution is a payroll deduction, Jim should retain a pay stub, a Form W-2 wage statement, or another document furnished by the employer that shows the total amount withheld for charity, along with the pledge card showing the name of the charity. It is important to keep these records as the IRS may require them for verification if Jim itemizes his deductions on his tax return.