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August 26, 2010

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Has anyone used the Itsdeductable free tool on Intuits site to help document deductions? Someone told me about it today, says has been using for years. Instead of guessing a value on a bag of clothes, you can put in each individual item, with a value pulled from IRS guidelines. He says it gives good values, much more than a big bag by itself with a guess. I was wondering how supportable it was, I'm assuming you would still need the receipts, though those are usually just blank when you give non-cash items.

My wife and I have donated a ton of used items over the past couple years. Its saved us a lot of money on taxes. Basically anything usable thats not readily sellable goes to a charity.

I love Goodwill - it's close, they're friendly, and I much rather our good but not-able-to-fit-anymore clothes be used than added to a landfill somewhere.

Freecycle and the Free category on Craigslist is also awesome although you won't get any tax credit.

Tim

I have been using ItsDeductible for 3 years now. I love it. You have to enter all your items one by one. What I do is when I assemble all the items to donate, I write everything in a note pad including the date. If it is a very costly item I take a photo as well (along with the tag showing the price. Yes I had a few of those). And you need a receipt from the charity as well. Its dedutible is just a place to keep everything together and get "suggested" value. I saw that is quotes because the values are not set in stone, they have a single value for lets say a "shirt", it might a normal no name brand shirt or a costly designer shirt, they suggest the same values, so if yours is not a costly one you can reduce the amount (or vice versa).

Itsdeductible imports everything beautifully to Turbotax, if you use H&R block tax s/w use the DeductionPro. Both of them are free and both of them keeps track of cash and non-cash donations.

Great advice! It's amazing the stuff we through away that still has life left in it. I have a relative that has picked up lawn mowers, snow blowers, TVs and other items in the trash; he then repaired them. Typically he uses what he has repaired or gives the fixed product away to people that need a new whatever, but can't afford it. Personally, if I did what he did, I would try to sell the fixed item on eBay :)

$400 for a used door? That must be one heck of a door especially considering the most expensive door sold at my local Lowes store is $483. Are you sure that wasn't the cost of the new door?

That being said interesting thought on donating stuff like this. We have a couple places that accept donations like this (1) The Habitat ReStore, and (2) the county ReUse Store.

Aside from that I use Freecycle a lot to give away items I don't want/need but want to keep it out of the landfill.

@Tim

I've used the Itsdeductable tool also. Just keep a list of what you are donating (ie - 5 girls dresses, 10 dress shirts, etc.) and you can go in and just fill out the form with how many and the condition, and it will provide an estimate you can use for your taxes. I print the list and keep it with my receipt from the charitible organization for when I do my taxes. I believe the rule of thumb is as long as it is under $300 total value you shouldn't require any additional documentation.

This reminds me of another post I read about the benefits of donating.

http://christianpf.com/see-the-impact-when-you-donate-to-charity/

Hopefully other people will follow the trend and become better people for it!

We always keep track of the items we donate. We use Goodwill prices when we are calculating the value at the end of the year. Goodwill has set prices for shirts, kids clothing, etc, so it makes it incredibly easy. I haven't done It's Deductible because we've had this system set up for quite a while. When we are doing a donation we make a list - Men's shirts, men's pants, kids' clothes, shoes, etc. Then we just tally them up as we put them in the bag to donate. We input it into Excel, print it out and attach it to the receipt from Goodwill.

The Habitat in our area just opened a ReStore. I wish it had been around when we were doing all the remodeling. Unfortunately so much got thrown into the garbage.

Not only is donating better than throwing away, in my experience, it is better than having a garage sale too.

For example, you can deduct the value of the item based on what Goodwill is selling it for. For clothing, usually that works out to more money deducted from my taxes than what I could sell it for in a garage sale. Plus, it is much easier to drop off a bag of clothes than to set up and man a garage sale for a day.

Of course, mileage may vary. If you are close to being able to use the standard deduction instead of itemizing, then you might be better off taking that and at the same time get the cash from the garage sale.

We donate a lot of stuff too. I haven't had a garage sale in five years. We almost had one this summer, but just didn't have the time.

Here's what I do with my tax-related charity receipts: I put a manila envelope marked "charity donations" in my accounting box (where I put all the receipts that are supposed to go in my computer.)

Then when it is time to file taxes, I have those papers ready to be calculated and looked over.

I go to a laundromat every Monday, and each time I arrive, I ask if any clothes were left from the week before. Usually, I get am armload, and I just add them to my own laundry, because some were left in the washer and mildewed.

After washing and drying my clothes and theirs, the laundromat castoffs get folded and go to a thrift shop, along with my own castoffs, if any.

Through tax deductions, I'm making money from other people's clothes in the form of charitable donations, and the supply never ends (apparently).

I used to live in an apartment complex, and every time someone either got evicted, self-evicted (left one night), or got a house-cleaning bug up their nose, their castoffs always were placed outside the complex's dumpster...where I'd come along and retrieve it for the thrift store. People would toss out bags full of clothes, bedding, a leather and fur coat, books, furniture, misc, kitchen stuff, misc. bathroom stuff (rugs, shower curtains, etc.), and baby stuff--OH MY GOD THE BABY STUFF! Two double strollers, a wind-up swing, a Fisher-Price walker, some scooter toys, a Diaper Genie, a crib mattress, sometimes a whole crib--but since I couldn't fit that in my car, I'd leave it. It wouldn't be there long, though--somebody would always get stuff I couldn't pick up. Again, I'd clean stuff up, take it to the thrift store, and let Uncle Sam pay me for my scrounging efforts.

If you're a "professional scrounger" like me, consider apartment complex dumpsters. laundromats, and other places people tend to go in and out of...lost and found stations at bus terminals, airports, taxi businesses, schools, community centers, etc.--make Uncle Sam pay YOU for other people's cast-offs. It's money for nothing, and the checks are free. :) Call it societal recycling.

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