Frequently Asked Questions

Record Retention

The length of time you should keep a document depends on the action, expense, or event the document records. Generally, you must keep your records that support an item of income or deductions on a tax return until the period of limitations for that return runs out.

The time you are required to keep records includes the period of time during which you can amend your tax return to claim a credit or refund, or that the IRS can assess more tax.

Keep record relating to property until the period of limitations expires for the year in which you dispose of the property in a taxable disposition. You must keep these records to figure any depreciation, amortization, or depletion deduction and to figure the gain or loss when you sell or otherwise dispose of the property.

When your records are no longer needed for tax purposes, do not discard them until you check to see if you have to keep them longer for other purposes. For example, your insurance company or creditors may require you to keep them longer than the IRS does.

Non Cash Charitable

You must be able to itemize your deductions on Schedule A of your tax return in order to the get tax benefit of donating items to charity.

To qualify for a tax deduction, you must donate the items to charity that is recognized as such by the IRA. Places like the Salvation Army, Goodwill, and various veteran's groups are obvious choices, and these groups are often willing to come to your door to pick up donated items. Churches, schools, libraries, and hospitals are other good outlets for your donations. If you are uncertain if your donation to particular group qualifies as tax deductible, just ask.

Document your donated items. You don't have to be precise: "One green shirt, one blue shirt, one red shirt, and one yellow shirt," is a little too much when "Four shirts" will do. "Three bags full" is not specific enough.

Get a receipt from the charitable organization to which you donate. The receipt should include the name and address of the organization, the date of donation, a general description of the items donated. Also, the receipt should contain a statement that you received nothing in exchange for your donation. The IRS requires that you obtain a receipt if the value of the items you donate is $250 or more. The receipt and your list of items stay with you - they do not get attached to your tax return.

The final step in the donation process is valuing your donation. Figure out how much the donation is worth so you'll know how much you can take as a tax deduction. Garage sale prices are a fair indication of the amount you can deduct. Visit resale shops like those run by the Salvation Army and other groups to get a good idea of the worth of your items. You can also use the Salvation Army's Donation Valuation Table http://www.salvationarmysouth.org/valueguide.htm as a good guide for valuing your used items.

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