09 Aug 2014 5 tips for organizing your charitable donation tax receipts
Donating to charity can reap many benefits…both emotionally and financially. I love the thought, that if I am not using or enjoying something I own, I can take it where someone can use the things I no longer need. And often, donating money to a cause in which I believe makes me feel better about the world and myself.
Whether donating to a large global charity or a small local non-profit, we all want to make a difference in the world.
When you donate items or money, as long as the organization is recognized as an acceptable charity by the IRS, you should be able to claim it on your taxes which can make a significant difference in the amount you may owe on your taxes (or increase your refund!).
Organizing tax receipts
Tip 1 (Organizing Tax Receipts): Make sure the organization is a legitimate non-profit organization and acceptable by the IRS or your donation may not be able to be used on your taxes. The IRS has a guide for this HERE.
Tip 2 (Organizing Tax Receipts): Always ask for tax receipt either in person or via email. Many organizations will automatically provide you with a receipt but you can’t take the write off on your taxes if you don’t have anything with which to back it up!
Tip 3 (Organizing Tax Receipts): Once you get the tax receipt for your donation, you want to be able to find it come tax time. Designate both a virtual (for emailed receipts) and a physical folder or document storage box. Clearly label each in a way that you can find it. Mine are labeled: Charitable Donations and are located in my TAX folders. You can call yours whatever you like as long as it makes sense to you. Keep your digital and your physical files named the same way for consistency and ease of use. If you tend to donate a lot, you may wish to consider separating out your financial contributions and your donations of items.
Note: It can be easier to have all of your tax receipts in one format instead of some virtual and some on paper. Since you often don’t have control over this, you can either print up each digital receipt and place it in your physical folder, or scan the paper ones and save them in your online folder. It’s an extra step that many of us may not take, so having two locations for the same type of item may be the lesser of two evils.
Tip 4 (Organizing Tax Receipts): Utilizing virtual tools can help get the fair market values for items being donated and to keep track of what you donate.
Here are a few options that can help you keep track all of your donation throughout the year and get the most return out of what you are donating.
iDonatedIt is a free app that tracks and values your non-cash charitable donations.
- tracks the date you donated non-cash items to a charity, the charity you donated items to, the items you donated, and the fair market value of those items
- lets you attach a photo to your donation list to document your donation
- allows you to e-mail the detailed donation report to yourself or to your accountant
- for use on iPhone or Ipod Touch
Its deductible is a free Intuit product that works with TurboTax. This app tracks cash and on-cash donations as well as mileage that could be considered a write off.
- tracks your donations by date, donation type and allows you to add comments
- imports your information to TurboTax
- calculates the value of your items with resale value based on the style and condition of your items
- available online or as a mobile app
Charity Deductions is affiliated with Ebay and values items based on current Ebay values.
- tracks cash and non-cash charitable donations
- available online
- currently costs $24.95 per year
Tip 5 (Organizing Tax Receipts): Organize your receipts immediately by getting them into the proper place. Don’t stuff them in a bag or leave them laying about. That’s just asking for someone to use it as a scratch pad, have it be crumpled up on the floorboard of the car or accidentally recycled. If you are using an app, do it onsite before you drive away so you aren’t tempted to ‘do it later’ which may never come.
Finally, when you do your taxes, be sure to provide this information to your accountant or input it into your calculations. Otherwise, any work you do saving the information throughout the year is wasted.
In the Franklin & Nashville area, some of my favorite places to donate items to include Our Thrift Store and Graceworks. Some of my personal favorite organizations to donate money or items include Walden’s Puddle, Bridges Domestic Violence Shelter, Middle Tennessee Golden Retriever Rescue, The Heritage Foundation and The Harpeth River Watershed Association. A new consignment shop has opened up recently in Brentwood called Couture for a Cause at which you consign clothing and accessories. The shop then donates the proceeds to a charity of your choice. Recent organizing clients have used it successfully with moneys going to Saddle Up and Walden’s Puddle.
Find your favorites, donate as you wish, and organize those tax receipts so you can be ahead of the game on April 15th!