Online tools to value your charitable donations
Posted on December 16th, 2008 – 5:52 PMBy Kara McGuire
This week’s Dollar Duo tackles the annual chore of valuing your unwanted items for tax purposes. Charities don’t typically provide much guidance. It’s up to you, they say, to decide how much an item is worth for a tax break.
You’d be surprised at the rich valuations provided from Itsdeductible.com, a free service from the makers of TurboTax.
Take the skirt that’s featured in the video. It’s a work-appropriate skirt in good condition from maker Kenneth Cole. I paid between $30 and $40 on clearance a couple of years ago and figure that I wore it maybe a dozen times.
How much can I donate for this item?
Based on the program’s guidelines, which allows you to deduct more for an item that has a name brand and “is still useful for the average consumer today,” I could value it at $9.00. That’s a lot more than the $1 or $2 I used to affix on the item.
From the explanation on how It’sDeductible figures out fair market value:
The fair market values provided in ItsDeductible are created by acquiring sales data from a variety of resale stores across the United States and from eBay, the online auction Web site.
Using Intelligent Indexing™ technology, ItsDeductible compiles price data from resale outlets and thrift stores, as well as current eBay market data. We capture, aggregate and analyze millions of online transactions each week. The result is a comprehensive database of fair market values that will help you meet IRS guidelines for reporting charitable donations.
To hear about valuing your donations straight from the bearded guy’s mouth, check out IRS publication 526.
Other nice features: The program lets you keep track of donations year round (no more missing scraps of paper filled with your chicken scratch), imports the data into TurboTax, and keeps a running tally of how much money it guesses you’ve saved in taxes so far.
In the video, John suggests going to consignment stores and pricing items. But I say let this program do the work for you.
2 Responses to "Online tools to value your charitable donations"
Another piece of advice for those donating goods to goodwill etc. Lay everything out and take digital photos of all the items you’re donating.
Burn a CD and keep it with your filed tax return. The IRS has started cracking down on questionable donations and you’ll want to have better proof of what you donated in case of a future audit.
[…] Fortunately, the holidays correspond with the end of the year tax time. So it’s a good time to cull through your unwanted stuff and donate it to charity. […]
