I See Big Money in Your Future!

Alright, people, listen up! :)

I just HAVE to share a website with all of you that will literally save you money. When you donate items to charity, be they clothing or other goods, all you get to document the gift is a generic receipt stating the date and the overall quality of the items. It is left to you to actually count the articles of clothing and what-not and place a monetary value on them. This process can be very overwhelming and time consuming, so most people just give a ballpark figure per trash bag of donations. This is usually a figure well below resale for the goods which subsequently decreases the potential tax deduction awarded for the donation.

What's the solution? ItsDeductibleOnline.com. This is a free service of TurboTax. The only thing you need to sign-up for an account is a valid email address and a password. Then, the program asks you to estimate your earnings so that it knows under what tax bracket you fall, and you're off to the races. It is still somewhat time consuming to go through each item one-by-one (and I recommend sorting your items by category and entering them in multiple quantities--this saved me lots of time once I figured that out), but it is far less time-consuming than going through each item and writing them down and guessing at their value and so on.

Using this website gives you four huge advantages over the alternatives. First, you do not have to come up with a dollar value for your items; you only have to assign a "high" or "medium" quality label to them ("low quality" is disqualified for deduction by the IRS; if you rate it as "low" just throw it out--charities don't need your trash any more than you do :). Second, it keeps a record of your donations all in one place, and you can easily add to them throughout the year rather than trying to rush around at the last minute before you file your taxes. Third (this only applies for TurboTax users), you can import your deductions directly into your TurboTax return, so as to not have to duplicate your work. Even if you use an accountant or some other computer program to file your taxes, though, the information is easily printed off and, again, all in one place. Fourth, and most importantly, the more accurate your records with regard to valuation of your donated items, the bigger your tax deduction.

I just used the program to estimate the value of three bags of clothing. If I had to ballpark per bag, I would have only guessed $50-100 each. I was pleasantly surprised when the total came to a whopping $683, which translates into a 102 dollar tax deduction.

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