Documenting Tax Deductions for Goods Donations

As an add-on to my recent post about donating goods to charity, I wanted to include a quick list of how we support our tax deductions each year.

• Every time I bag items for charity, I photograph them in groups of like-kind, first.
• When we get the receipt from the charity, I attach an itemized list and a Word document with thumbnail-sided photos of all the items that were included in that date’s donation.
• At tax time, I sit down with all my receipts and lists and enter them into It’sDeductible (https://itsdeductibleonline.intuit.com/) which gives me the values of the items for each donation.  Since we use TurboTax to do our taxes, I can import the information directly.  However, even if we didn’t use TT, It’s Deductible gives us a list of the total value of each of our donations throughout the year. 

Some prefer to skip the work of trying to deduct charitable donations, but we’ve found that it’s worth it.  Over the course of the year, we usually end up donating a few high-dollar items along with dozens of outgrown kids’ clothing items, books, home decor, and little things like kitchen utensils we haven’t been using.  Last year, we wrote off over $4200 (about 1100 total items) over the course of 7 donations, which gave us over $1000 back on our return.  Since we weren’t using what we donated anyway, it’s nice to have the cash instead!

And, yes, we have actually been audited once, so I was glad to be able to send the pictures to the IRS that year, along with everything else, to prove that we DID accurately itemize what we donated.

What do you think?  Is it worth it to itemize your deductions each year?