Wednesday, October 13, 2010

How to calculate the value of your charitable donations

Have you ever wondered what expenses can be deducted from your taxes? For example, church tithes and donations to church projects, trips to volunteer activities, or tickets bought for a fundraising cause? Now there's a free and easy way to find out if "it's deductible." Itsdeductible.com is a free website service by Turbo Tax that is designed to help you calculate the value of your contributions.

I first learned about this free online tax calculation from a dear friend who regularly donates clothes and other items to non-profit organizations like Goodwill. So when my husband and I did some "fall cleaning" recently and ended up with eight big bags of items for donation to The Salvation Army, itsdeductible.com was very useful in calculating the values of all the items we gave away. Itsdeductible.com helps you keep track of your donations whether they are cash, bonds, items or gas mileage, so you don't need to guess their value. More importantly, the value given is in accordance with the IRS' "fair market value."

To use itsdeductible.com, simply create an account and declare your filing status and estimated income range. Once you've provided the info, the website will then calculate your estimated federal tax rate. You can now begin recording your donations. For items donated, the categories are extensive - from clothing to furniture to pet supplies. The resale values are dependent on the style and condition of your donated items. For example, a men's sweater in very good condition (described as "high") is valued at $18, while a sweater in good condition (described as "medium") is priced at $9. You can also add your own item if it's not listed in any of the categories, such as leather jackets or motorcycle helmets.

It's always nice to save money, and with tax time quickly on its way, it's never too late to follow up on your deductibles with itsdeductible.com.

Note: itsdeductible.com is only applicable to US taxpayers.

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