Not Made Of Money

The beginning of December we look to complete any charitable contributions for the current tax year. We give monetary donations throughout the year, and the charities we support provide us with a letter stating the dollar amount given for the current tax year.  (We already know that amount because we use Quicken and know how much and to whom we have paid our charitable contributions so it is easy to re-check their calculations).  However, the first week of December is when we clean out the physical goods that we no longer use and donate them.  

We sort through items that we no longer wear, clothing that no longer fits, items we don’t use, and toys that the kids have outgrown.  Then we make a detailed list of the items including each item’s condition (i.e. poor, fair or good condition).  We make the list very specific because it will be used when we calculate the amount of deduction that we can claim on our tax return. 

Once we’ve collected the items and made the detailed list, we donate the items to the Salvation Army.  They provide us with a receipt which includes the date the donation was made.  We put the receipt and the detailed list of donated items in our tax return file, ready to be used when it is time to prepare our tax return.

We use Turbo Tax to prepare our taxes and when we purchase that it comes with a program called “It’s Deductible”.  This program takes you step-by-step through calculating allowable deductions and determines and assigns actual fair market valuation. 

That is why we make the list so detailed, because it provides a basis for valuation.  It also gives us the backup we need.  Looks like we’ll bring out our digital camera and keep photos of the donated items this year because I saw on the “It’s Deductible” website to

“Attach Digital Photos – The IRS recommends that you keep pictures of your donations. ItsDeductible software makes it easy by attaching digital photos to your donation records.”

If we didn’t use Turbo Tax, the Salvation Army website has a calculator for figuring the deductible values for donated items. 

 

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