Do you donate items to a non-profit tax-exempt (501(c)(3) status) organization like Salvation Army or Goodwill? If so, do you claim those items on your taxes (if you itemize)?
Valuing non-cash contributions at fair market value can be difficult to do, since we all have such differing views on how much an item is worth (just visit any garage sale).
Here are some ways to help you maximize your contribution and stay legal in case of an audit.
- When I have a donation ready to drop off, I enter every item in It's Deductible Online (it's free to use). You can see the value of every item that you enter and print off a list to keep with your tax documents.
- I also take a picture of my pile of stuff to donate as visual proof in case of an audit.
- When I make the drop off (or an organization picks it up), I make sure that I get a receipt with the date and I staple my list to the receipt.
- File your receipts in your annual tax file (you have one, right?)
- At the end of the year, you can log in to your account and see the valuation of all your donations for the year. Use that information to enter your deductions for taxes (if you itemize).
You can check this IRS tool to make sure that the organization that you're donating to has 501(c)(3) status and is considered tax exempt for donation purposes.
That's how I keep track of my non-cash donations. A few other sites that list values are:
How do you keep track of your non-cash donations?
Of course, please consult your tax professional regarding the tax laws and your situation. These are just examples of how I organize my non-cash contributions.