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With summertime upon us, have you been to any yard sales lately? Or do you spend countless hours gathering together all your "junk", sorting it, labeling it, then sitting all day waiting for prospective "customers" to sift through it, only to offer you pennies on the dollar?

Here's a much easier and less time consuming way to get rid of all that stuff, and let Uncle Sam pay you for your time.

Instead of selling your junk at a yard sale, have you considered the tax benefits of donating it to charity? Non-cash charitable contributions are deductible just like cash donations -- and the same basic rules apply.

1. To be deductible, the contribution must be made to a "qualified" organization, which includes any organization operated for charitable, religious, educational, scientific or literary purposes, or for the prevention of cruelty to children or animals. When in doubt, just ask the organization if they are "qualified" and they'll be able to tell you.

2. For a contribution of $250 or more, you can claim the deduction only if you obtain a written acknowledgment from the organization.

3. When you give cash, your deduction is simply the amount of the cash contribution. When you give property, including clothing, toys, games, sporting goods, household items and appliances, your deduction is the "Fair Market Value" (FMV) of the item.

Here's where most people miss out on hundreds or even thousands of dollars in tax savings -- most folks are clueless as to what the FMV of their stuff is, so they usually underestimate and don't take a high enough deduction.

Obviously, the FMV of most used household items or personal items like clothing is much less than the price paid when new. But don't assume that the FMV is worth so little that it's not worth donating (and deducting) it!

One legitimate way to assign a FMV is to claim what the item would sell for at a flea market, a second hand store or a thrift store. Have you ever been to a thrift store? Many towns have one -- go check out the prices in your local thrift store to get a feel for just how much your old clothes and other junk is worth -- you'll be surprised.

And if you are still not sure about the FMV issue, there's an excellent software program available that will greatly simplify this whole process of determining value -- it's called "ItsDeductible" and it sells for around $20 (well worth it!) Check it out at www.itsdeductible.com.

From a data base of nearly 10,000 items, ItsDeductible assigns an accurate FMV determined in accordance with IRS guidelines. Each donated item it given a specific value, based on whether it is in Good, Fair, or Poor condition.

The program is distributed by Intuit, maker of Quicken, Quickbooks and TurboTax, and comes with a guarantee that you'll realize at least $300 in tax savings from using this program, or your money back.

Like cash contributions, you report non-cash donations on Schedule A. And if the total of your non-cash donations exceeds $500, you must complete Form 8283 to provide some additional information.

ItsDeductible will also prepare Form 8283 for you. Or you can just complete it yourself; to get a copy from the IRS website, check out: http://www.irs.gov/pub/irs-pdf/f8283.pdf

Instructions for Form 8283 are here:
http://www.irs.gov/pub/irs-pdf/i8283.pdf

And for more information on the topic of charitable contributions, the IRS has 2 publications available:

Publication 526 -- Charitable Contributions
http://www.irs.gov/publications/p526/index.html

Publication 561 -- Determining the Value of Donated Property
http://www.irs.gov/publications/p561/index.html

Happy Donating! And Happy Deducting!

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