Maximize Tax Write-Offs by Tracking Donations


save-track-tax-write-off-donations

We make donations primarily because we want to do good, but it’s also nice to know you may get a tax write off. But too often we neglect or completely forget to take that write off because it just seems too complicated to track, especially when it’s not cash. It doesn’t need to be. Here’s how to track your charitable donations.

ItsDeductible Donation TrackerSource: turbotax.intuit.com 

  • Keep an ongoing log of all donations. Choose the system that works best for you, whether it’s a computer spreadsheet, a notebook or a smart phone app.
  • ItsDeductible Donation Tracker from TurboTax let’s you track items and money donated, as well as mileage. When its time to do your taxes, the app will import donations into TurboTax.
  • Always take a picture before you send in an item in for donation. Some apps will let you store pictures of the item an receipt with the entry.
  • Make sure to get a dated receipt from the organization.

mile iqSource: mileiq.com

  • Miles driven in service of a charitable organization can be deducted at 14 cents per mile. If you want an app that just tracks mileage, there are plenty to choose from like MileTracker, MileIQ or TripLog.
  • If the cash or item value is more than $250, you’ll need written acknowledgement from the organization showing amount, description of contribution, and stating whether goods or services were provided in exchange for the gift.
  • If you did receive a benefit, like free theater tickets in exchange for a cash donation, then take your donation and subtract the fair market value of the benefit. That is the amount you can legally deduct.
  • Look for a trusted valuation guide to help you determine the fair market value of your donation.  Salvation Army has a great one to get you started.

valuation guideSource: satruck.org

  • Clothing and household items typically need to be in good (used) condition or better to be considered deductible.
  • Keep in mind only qualified organizations count. In other words, just because you donated to someone’s Kickstarter or GoFundMe campaign, does not mean it’s tax deductible. If the project is affiliated with a non-profit organization it may be deductible.

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