10 Big Tax Deductions Too Many People Miss, Part 1

Here's a piece from Money Central that details tax deductions that many taxpayers seem to forget. Let's get started with part 1:

Noncash contributions

Charity, as I hope everyone remembers, begins with a tax deduction. If you didn’t have the cash when it came time to contribute, I hope you charged it. The deduction is allowed in the year of charge, not when you actually pay the bill. Get a receipt from the charity to which you made a donation and, if you’re still worried about documentation, get the credit card company to send you their record of the transaction.

Now, let’s say you emptied your closets and gave everything to Goodwill or a similar charity. The value of your donated items -- clothes, furniture, whatever -- is deductible. Get a written receipt. With noncash charitable contributions, the rule is simple: No receipt means no deduction if you get audited.

We do this 2-3 times a year -- usually at the change of seasons. We take the clothes we didn't wear in the past season (which means we haven't worn them in a year) and give them away. Before we do, though, we make a detailed list of them on a spreadsheet and estimate their value. We then staple our receipt to a printed copy of this document and place it in our tax files. It's then handy when we do our taxes the next year.

Click here to read part 2 of this series.

Comments

[Anonymous]

There are a couple of software packages on the market that can help with estimating the value of non-cash contributions. They won't help you with unique artwork or grandma's jewelry collection. But they are useful for estimating the value of common items like used clothing. They operate off of a database of values for particular items in particular conditions.