In recent years the IRS has stiffened the required documentation for donations of clothing and other household items to nonprofit organizations like the Salvation Army or Goodwill Industries. “Three bags of clothing” or “two boxes of books” is not an adequate description of the donated items to claim the deduction. You must have a list of the donated items along with the fair market value you have placed on those items, and some form of receipt or acknowledgement from the organization.
Handy websites to help you evaluate your noncash items:
The Salvation Army online evaluation guide from clothing to appliances, furniture, automobiles, and more can be found here.
Goodwill Industries has a downloadable PDF evaluation guide in the yellow box (middle of the page) found here.
UsedPrice.com contains online Blue Book valuations for different categories of noncash donations from television sets and computers to guns, musical instruments, power tools and more. Visit the site here.
Use mobile apps for tracking, lists, or photos of your charitable giving
Two apps you must know about are iDonatedIt and UDoGood.
Both apps have similar features: tracks the date you donated non-cash items, tracks the charity and the specific items you donated plus helps you determine the fair market value of those items. It allows you to keep a permanent record of the items that meets the compliance requirements of the IRS. With the click of a button you can email the detailed donation to yourself or your accountant.
Deductions related to your vehicle usage
In addition to the usual cash donations that you have made throughout the year, you may be able to deduct the cost of using your vehicle if you volunteer your time or provide a service to a qualified charitable, educational or nonprofit organization.
There are two options available for claiming vehicle expenses and, naturally, the IRS requires you to have “reliable written records” for either method:
- To use the standard charitable mileage rate of 14¢ per mile, your records must show the name of the organization, the dates you drove your car for your charitable work and the number of miles driven.
- To use the actual vehicle expenses, your records must show the costs of operating your vehicle that directly relate to your volunteer work.
You can also deduct parking fees and tolls regardless of which method is used.
So, if you are a scout leader, a Red Cross volunteer, spend a few hours helping out at the local Food Bank or are actively involved with your religious organization, your vehicle expenses may increase your charitable contribution deduction.
In addition to volunteer miles driven, you may have spent money out of your own pocket within the scope of your volunteer work. These expenses might include office supplies, uniforms, and even travel expenses if you were away from home while performing your charitable service. These documentation requirements for out-of-pocket expenses apply:
- You must have “adequate records” to prove the amount of the expenses.
- You must obtain an acknowledgement from the organization before you file your tax return that contains a description of the services you provide, a statement that says you were not reimbursed for the expenses, and that you receive no tangible (other than religious) benefit from the organization.
Deb Howard Greenleaf, EA, CEO and Principal, of Greenleaf Accounting Services provides virtual accounting and bookkeeping services and specializes in financial management to consultants, coaches, solo professionals, and other small business owners across the US. Deb is an Enrolled Agent (EA)—an IRS-licensed tax professional—and specializes in small businesses and entrepreneurs filing Schedule C or as an LLC. As an Advanced Certified QuickBooks ProAdvisor, Deb spends her day in QuickBooks Online and specializes in providing QBO support.