From the Minutia File: Tax deductions that straddle the New Year
Our clients give generously to charitable organizations throughout the year, but not suprisingly a looming tax year-end deadline sends many pens flying to checkbooks in late December. Straddling the tax years presents some question of in which year a deduction can legitimately be taken. In general, the IRS considers the mailing of a check to be effective delivery to a charitable organzation, so if you mail the check before Dec. 31, it is an allowable deduction for that tax year. Should your account hold insufficient funds for the check to be cashed upon its receipt, even in the new year, you may not take a deduction for that amount in any year UNLESS you fund the account before the recipient presents the check to the bank. In that case, the deduction is still allowable for the previous year, when the check was presented but not cashed.
To clarify deductions that may straddle two tax deduction periods, check with your ShindelRock accounting professional.