October 26, 2011

Track and Value Your Donations for Tax Deductions

Intuit has a free tool on its TurboTax.com site called It's Deductible that you can use to track and value the charitable donations you make.   If you make a fair amount of charity donations in a year then such a tool can be helpful.   Its particularly useful if you donate many household goods or clothing items which need to have a 'fair market value' associated with them.   The tool uses values based on the IRS guidelines which helps you keep within acceptable limits.  My wife and I have used a spreedsheet to track our expenses and just taken guesses on the fair market value.   Our system works OK but its not perfect and I think it would be better to have an independent source to use for the FMVs.

Signing up is pretty simple and they don't ask for your personal information like SSN or address or anything.   Once you've got all your information in the tool you can export it to Turbotax, PDF file or HTML.   

First of all you can enter the name and address detail for the specific charity once and then use the same entries out of a drop down list.   I started with an entry for our local Goodwill store.

Then you can search for specific items to add or navigate the different categories.   Shown here I searched for 'pants' and it gives me various categories of items that include the words 'pants' :

 Once you find the category you want you then get several more options.   I clicked on the entry for Pants under Mens Clothing and it gives me several options for different styles of mens pants.   I can then enter the number of each style that I donated for those that are in the medium or high value category.   The IRS no longer allows deductions for items of 'low' value so that section is grayed out.

 Lets say I had a pair of cargo pants and a couple pairs of jeans.   They were used but still OK.   I decided they were in the 'medium' quality section.   The final entry would look like this :

From here I could add more items or finish the donation entry.

From the main screen on the tool you can look at summaries of your donations.   This lets you view a HTML or PDF version of the donations that are nicely formatted for printing.  

This is a pretty handy tool for tracking your charitable donations.   Its free too.

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