TAX SEASON: Dealing With Charity

She may play a greedy, desperate housewife on ABC (DIS), but in reality, Eva Longoria is all about giving it away (to charity).

On March 4 Longoria, who is the national spokeswomen for PADRES Contra El Cancer, a non-profit that supports Latino children with cancer, accepted a $200,000 donation from AT&T (T). "The money AT&T raised will help us continue supporting families coping with the devastating effects of childhood cancer," she said.

But, while your own charitable giving may not reach six-figures, any large uptick in gifts this year is going to catch the attention of the IRS. However, with a little careful planning you can be sure that a potential audit will not leave you regretting your generosity. (Yes, we know Eva didn’t donate the $200,000 out of her own pocket—in this case—and therefore doesn’t have to worry about tax implications, but work with us.)

When making any donation you plan to claim, keep the paperwork to prove your good deed, says Jackie Perlman, a lead tax researcher for the Tax Institute at H&R Block (HRB). “You can’t avoid being red flagged when you make a large donation,” says Perlman. “Your concern is backing up the deduction you took. Have the proper documentation to prove you donated to a qualified charity.” Whether the donation is cash, stocks, or even a car, “get that ‘Thank you for the $10,000 donation,’ says Perlman. “You need the acknowledgment from the charity and you need a bank record of the transaction.” A cancelled check, or a credit card or online donation receipt, will suffice so long as you “verify at both ends that you really paid it and they really received it,” says Perlman. To make sure you are donating to a qualified charity, check the online list kept by the IRS called Publication 78.