Tax ??? - ItsDeductible

[dizcrazy]

Hi all,

Does anyone use the software ItsDeductible, from the TurboTax people?

Friends told us it was a great way to keep a running total of what you donated to charity and it will tally up how much the government will allow you to deduct at the end of the year.

Our account told us the general deduction is $25 a bag, but friends said that based on what we donated (5 sweaters, 7 shirts, 3 pair of pants) we could have decuted at least $75 for that bag alone! (Of course, receipts are needed!)

Any thoughts?

 

[Straitlover]

This is what I do:

I make a list of everything I'm donating. Just general (5 shirts, 2 sweaters, etc). When I go to drop it off, they give me a receipt. I look to see if they have a price list that I can take w/ me. If they do, I get it and staple it to my list. If they don't, I run in and see what they are selling the items for and write that on my list. I save those lists in a folder until tax time.

It only takes a minute or two, and it's free (no buying software). If you go to the same place all the time, you only have to look up the price once.

EDIT: Another reason I do this is because I only want to deduct what the items actually would sell for, even though the IRS might allow a bigger deduction (it's a conscience thing). A friend of mine went through a ton of old clothes a year or so ago to donate. I'm telling you, this stuff was so old, ugly, waaaay out of style and in some cases satained and real dirty, that it would never sell, even at the thrift store. The list she got from her tax guy that came from one of those tax deduction software packages said she could deduct like $10-15 per dress, $10 for shirts, etc. She ended up w/ well over a $700 deduction for basically trash. I know that they do not sell shirts for $10 in most thrift stores. I had been playing w/ the idea of getting the software until this. For me, I did not feel comfortable taking that high of a deduction when I know stuff, if it sold, would never sell for that much. So, I decided to do what I came up w/ in the paragraph above. Prior to that, I just dropped the stuff off in the drop box and got no receipt at all!!!

Anyway, that's just me. I'm not trying to preach to anyone .

 

[GoldenOldie]

It'sDeductible gives you three ways to value your donation. They have categories for Good Condition, Fair Condition and Poor Condition.

You are the one that makes the determination, not the software.

Example Donation:

Girl's long sleeve casual blouse. If you say it is in Good Condition it will value it at $5. For Fair Condition, the value will be $4. And for Poor Condition, the value will be $1.

You will still need to prove what you donated with photos and donation receipts but the software makes it much easier to figure what you are entitled to deduct for the donation.

It also allows you to manually enter donated items that aren't in their database like cars, boats, etc. But when you exceed $250 with ANY donation, you better have proof upon proof of the condition and valuation as well as an itemized receipt from the agency accepting the donation of what it was and what it was worth.

Can people lie about the condition and value of their donation with the software. Sure they can just like they can without using any software. Is that a reason for not buying the product? Not for me.

I personally love It'sDeductible. JMHO.

 

[dizcrazy]

Thanks for the replies!

I have BAGS of items to donate and taking pictures would mean time and money for photos. How do you have proof upon the condition of the donations?

People are amazing, aren't they? I would never donate something stained or dirty. But I know people do

 

[GoldenOldie]

Originally posted by dizcrazy
..How do you have proof upon the condition of the donations?

Photos are by far the best option unless you have kept every original receipt you got when you purchased each item - doubt it! You don't have to take a detailed individual photo of each item. Spread out enough to cover your bed and take a photo of the whole thing. Unless you have enough stuff for a moving van, you should be able to cover it all in just a few photos.

If you are still using a film camera, the $10 or so you will invest in a roll of film and its processing can save you hundreds should you get audited. If you have a digital camera (or can borrow one from a friend or relative) then it will cost you next to nothing to take the photos and burn them to a CD to keep.

 

[Jasminesmommy]

Did you know you could deduct what you give to your church each Sunday?? I didn't know that until the tax guy said something.

 

[DMRick]

Did you know you could deduct what you give to your church each Sunday?? I didn't know that until the tax guy said something.

Sure, you can put it right on your schedule A, and of course you should have a receipt coming from the church. The receipt usually has a note on it saying no goods were exchanged for this money. That's to stop people who pay for something a church is selling, from using just their cancelled check as proof of donation : )