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Spring cleaning? Sweep up big write-offs

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in Small Business Tax

If you’re doing your annual spring cleaning, remember that one person’s junk is another person’s treasure. Be tax smart when donating your used clothes, toys, furniture and other items to a local charity. Studies show that people regularly underestimate the deductible value of the assets they donate.

The amount you can deduct is generally the item’s fair market value (FMV). That number can vary widely, depending on the item’s age and condition. To help set FMV for various items, visit these Web sites:

• Salvation Army: www.satruck.com/ValueGuide.asp
• Turbo Tax: www.itsdeductible.com
• IRS Publication 561, Determining the Value of Donated Property, www.irs.gov/publications/p561.

Final tips: Carefully document your contributions, including any special circumstances (e.g., donated items that you never actually used). Retain a receipt from the charity.

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