So I paid a lot of donations last year without any receipts or making sure that its an IRS-Qualified organization to receive the donation or not.
Now, I am doing the itemized deductions for the first time with the new house an all. If I include all these donations (Zakat, etc.) in the cheritable donations, am I asking for trouble or is it a common practice?
Re: ? about itemized deductions
IMO, its a bad idea. You can take whatever itemized deductions you want right now, but donations (especially donations that accumulate to a sizeable balance) are usually a red flag that alerts IRS to conduct an audit of your tax return. If you are audited, then you need to produce receipts and to show that the organizations were 503(c). Failure to have those receipts technically means you can't take those deductions and thus may have underpaid your taxes. In the first place, I doubt you would want to have your tax return audited by the IRS, and that too where you don't have documents supporting your itemized deductions, so eliminating such red-flags is usually the first thing any tax advisor will tell you.
I think this is the conceptually correct answer.
However, check from your local H&R block, a tax CPA or call IRS free direct help line to see if there is any loophole. If there is one, likely it may be just for *de-minimus *amounts, though I seriously doubt it. Can't you get tax receipts from a local charitable organization to add up to what your donations were? Some of them are not disciplined with issuing timely receipts and basically write them whenever someone approaches them for one. You can consider that route as well.
Re: ? about itemized deductions
Agree with what Faisal said. In addition while you may not nessassassy need a receipt in all circumstances without one you are certainly asking for trouble. For a cash gift to a charity (IRS approved) I believe you can make a $300 deduction (don't take my word for it) if you have the canceled check, if it's over $250 you will actually need more than a cancel check and more than just a receipt. Play it safe, no receipt = no deduction.
Re: ? about itemized deductions
Thanks for your response guys.
I completed my taxes last night. Even with the house, mortgage, property taxes, I figure I should just go with standard deductions. Thats because I didn't close on the house until May last year so my interest on the mortgage is not fro the entire year and that much. With all the interest paid, property taxes, medical bills, etc. and since I can't claim donations, the total itemized deductions amount beats the standard deductions amount ($10,000) only by a few bucks.
If I had really thought about it, I wouldn't have paid the property taxes in 2005 for that year. Instaed I would have paid it this year so I could use it as deductible money next year on top of the property taxes for 2006 itself. darrrrnnnn.
Oh well...