How much for that donated shirt?

My mother must have had a hand in writing the U.S. Tax Code--specifically the part that rewards me for cleaning out my closets.

Several times a year, I lug garbage bags of clothes, shoes and accessories to a local nonprofit's collection bin, and tell myself what a good person I am. Then I go home and place a detailed note in my tax file with the date and contents of my donation. Later, I try to figure out how much the stuff was worth.

Time was, I could donate just about any rag, place a value on it and take a deduction. No more. Any clothing or household items donated after August 17, 2006 generally must be in at least "good used condition or better." (There are other new rules; for details, see IRS Publications 17, 526, and 561.)

The government hasn't yet opined on what makes something "good used condition." But there's help out there to determine the value of your donations, courtesy of the tax-prep products TurboTax and TaxCut. In TurboTax Deluxe Deduction Maximizer and TurboTax Premier Investments, you'll find a supplemental program called ItsDeductible. TaxCut's equivalent is DeductionPro, available in its "Premium" line. (For our comprehensive test results on TaxCut and TurboTax, check out "Tax software test drive.")

The great benefit of these programs is that they determine values for your donated clothing and household goods. You type in "women's cardigan sweater" and the sweater's condition, and the program spits out a value. If you're not sure what to call the item you've donated, you can use a search engine to help. Both products let you print out comprehensive lists of donations and recipients.

We found ItDeductible's search engine a little better than that of DeductionPro. We saw it also gave slightly higher values for non-cash donations, perhaps because it has only three categories (high/medium/low) versus DeductionPro's four (like new, minor wear, average wear, heavy wear). It gave good information on long-term versus short-term capital gains for the purposes of valuing donated financial instruments, but had no information on art and collectibles.

DeductionPro was somewhat more comprehensive. While ItsDeductible only covers charitable deductions (donations of cash, stock, goods; and charitable travel), DeductionPro also covers medical deductions and other deductible items like tax-prep fees. It automatically calculates charitable travel mileage as well as periodic charitable payments, like a $10 payroll deduction to United Way.

You can buy these programs as components of the TurboTax or TaxCut products mentioned above, or as stand-alone programs. Both cost $19.99 as stand-alone products, though only ItsDeductible is downloadable. However, today when I looked on the web site for H&R Block, the maker of TaxCut, I found a free trial for DeductionPro. I didn't try it, but you might want to.

Comments

[Oakley Sunglasses]

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[Tobie Stanger (Consumer Reports)]

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