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Are you missing out on an easy deduction by failing to report gifts of non-cash items to charities, or by overlooking your out-of-pocket expenses for charitable work?
When you give clothing and other household items to charity, take the time to prepare a list of the items given for each date that you contributed, and attach a receipt from the charity, with its name and address, acknowledging receipt of the items. Include the fair market value of each item. What's the fair market value? Often, the receipt you get will have a list on the back with estimated values of certain items. Or, you can go down to your local thrift store and check out their selling prices. There are also companies that specialize in the valuation of items given to charity, one of which is William Lewis' Client Valuation Services. They have published a booklet containing hundreds of average current values. Visit their website, at www.taxsave.com, for more information. As for that car you no longer need, Kelley Blue Book has a website (www.kelleybluebook.com) where you can enter information about a vehicle and find its value. You only need a copy of an original purchase receipt when you give a new, never-used item, such as canned food for a food drive. In this case, you're allowed to deduct what you paid for the item. Does this seem like too much work? You'll be surprised at the value of your used things.
Other non-cash contributions include items purchased or amounts spent in helping charities do their work. Do you sing in the choir? Did you know that driving to church to rehearse is deductible, at $.12/mile? You might also be required to purchase sheet music, hymnals, robes, and other items - the cost of these is also deductible. While you can't get a deduction for the value of the time you have spent, you are entitled to claim your "out-of-pocket" expenses for these things, so keep the receipts and add them up for your tax preparer. Even if you don't have a receipt, a calendar reference, showing how much, where, when, and what you purchased, may be sufficient to allow the deduction.
Keep your auto mileage with calendar references for where, when, and how many miles you drove for any other charity work you might do, such as scouts, little league, etc. You are allowed a mileage deduction for charitable miles driven to do your work - but not just to chauffeur your kids to events. You have to be a leader, or a coach, or an assistant, or something like that. Another area often overlooked is lodging and food when out of town at a church convention or other affair where you donated your time and money to do charitable work.
Finally, many small businesses or their owners contribute to charities when they could advertise, in church bulletins or other charitable publications, such as a supporter booklet for a private school. Advertising often provides a much higher deduction than charitable giving.
With these matters, as in all others, consult your tax professional to provide you with guidance in getting the most out of your charitable deductions.