How to Use TurboTax ItsDeductible to Track Donations
TurboTax offers a free tax deduction-tracking software, called ItsDeductible, that values your noncash donations to charity using a combination of auction websites including eBay, resale outlets, and thrift stores, and helps you keep track of those donations. You can get It'sDeductible online through the ItsDeductible website and as a mobile app available for the iPhone and iPad.
How ItsDeductible Works
When you first use ItsDeductible, you set up a free account, and fill in some basic personal information such as your name, email address, and provide your tax filing status. Once you're set up, you select charities and then list the items you donated.
Figuring out the value of donated items can be difficult and potentially time-consuming without ItsDeductible. This is where using ItsDeductible really makes a difference. Intuit, the developer of TurboTax and ItsDeductible, explains how it values donations:
"To determine fair market values, we gather pricing information from auction websites like eBay as well as resale outlets and thrift stores across the U.S.
Every day we collect information from hundreds of thousands of completed eBay auctions to capture valuations that are not commonly found in thrift, consignment, or specialty stores.
We then perform a statistical calculation to determine the fair market value of the item, which is then translated to a high, medium, or low value.
We also collect pricing information through manual processes, for example surveying thrift and consignment stores across the country.
This combination of electronic and manual price-collection allows us to create a comprehensive, up-to-date collection of values based on real-world transactions that comply with IRS guidelines."
Tax Deductible Donation Reports
You can print four types of donation reports in TurboTax ItsDeductible, but you cannot generate the IRS Form 8283, Non-cash Charitable Contributions unless you import TurboTax ItsDeductible data into TurboTax tax preparation software.
ItsDeductible Tax Reference and Help
The TurboTax LiveCommunity is a tool for asking questions and for getting tips relevant to the part of ItsDeductible being used. Answers and tips are provided by other ItsDeductible users and TurboTax support staff.
For example, you can find helpful responses to questions such as the following, about the need for photos for Goodwill donations:
"While photographs are not required, they may come in handy if the IRS were to ever question your donations. I make photos of my items. I group 3-4-5 or more items on the table, bed, or car trunk and take a quick photo. Then I save the digital file on a CD-R or other external device with my other tax files."
You can find links to IRS publications provided under the Help link at the top of ItsDeductible Online.
TurboTax ItsDeductible Overview
TurboTax ItsDeductible is very easy to navigate, with intuitive links and drop-down selection lists. ItsDeductible does not support uploading digital images as evidence of non-cash donations, however.
ItsDeductible works best for people who prepare their annual income tax return with TurboTax. This is because TurboTax directly imports data from ItsDeductible. If you do not use TurboTax to prepare income taxes, you can use the figures on a printed report from TurboTax ItsDeductible.
You have nothing to lose by giving TurboTax ItsDeductible a try. You will likely gain a larger deduction for charitable contributions. Save tax deduction-related digital images and receipts on a CD or other media and store it with your yearly tax documents along with reports printed from ItsDeductible.