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Thursday, October 9, 2008

Are you donating used clothing or household items to IRS qualified organizations every year, and not claiming the full fair market value of those items? Since the IRS doesn't provide a way to determine the full fair market value, most people assign values of a few dollars to items they donate. This will cost you money each year. Using websites or software programs can increase your deductions, saving you money every year.

Check the web. Free information is available from the Salvation Army on a limited number of donated items. Go to the Salvation Army's USA website: www.salvationarmyusa.org. Then select "your help->donate->receipts->valuation guide."
Be more thorough. If you are willing to pay for your information www.charitydeductions.com is a website that has valuations for thousands of items and provides printable reports for your records and accountant for less than $15/year. It works for anyone with an internet connection and has a money back guarantee.
Use software programs. If you use tax preparation software, you should consider using their valuation related products that work together to optimize your deductions. TurboTax offers a program called It's Deductible and TaxCut offers DeductionPro software. Both programs are Windows compatible only, cost less than $20/year and offer guarantees if you don't save a certain amount. They can be downloaded from their respective websites or purchased at a variety of retail locations.
Consider cost effects. Any of the paid products should save you at least what you paid or you can get your money back, so there is really no risk is trying them out to increase your itemized charitable deductions.

There will usually be items donated that are not on their list. It is nearly impossible for a product to guess or know every type of item that people donate. What you must do in these cases is do the work yourself. You should be able to easily create a custom category, then search eBay to find items like yours to find your value. These programs aren't perfect, but do save you the time of finding all the values yourself.


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