Donating a pair of used men's underwear to charity is a tax deduction - $2 a pair if they're in excellent condition, but only half that if in poor shape. And you only used that chain saw for one teensy massacre, so it's in excellent condition. That's worth a $25 deduction.
And that sweat suit your wife wore twice before she forgot the New Year vow to drop 5 pounds could get you $22, not to mention gratitude for making it disappear.
The source for all this arcane data is H&R Block's DeductionPro, a $19.95 program for Windows 95 and up that provides answers to "fair market value," one of life's mysteries at income tax time.
Fair market value is what the IRS will let you deduct for non-cash contributions to charity. Figuring it out has always been a pain, and what looked like a solid $50 to you, might be just $5 to some gimlet-eyed IRS auditor. Here, the software operates from H&R Block's authority and research.
If your non-cash contributions exceed $500, the IRS is going to want to see Form 8283, and the software will help you create that literary masterpiece, and also export the data into TaxCut, the tax-preparation software from the same company.
If you just bundled a load of stuff out the door to a charity last year and kept no records, the software won't help you. But it will help you plan for next year.
Example: our attic is stuffed with evidence of the Twenty-eighth Amendment to the Constitution, the one which reads "Congress (and certainly not mere Fathers) shall make no law requiring the same pair of party shoes be worn more than once." When Daughter gets happily ever-aftered in August, the plan had been to haul them to the dump. But with DeductionPro saying they're worth $26.40 a pop when donated to charity, there's a new plan.
The software also helps you keep track of your cash and out-of-pocket expenses in connection with charitable efforts, which is important, since the IRS likes records. If they're complete, reasonable and accurate, they document your deductions. If they're works of great fiction, they'll be an exhibit in tax court.
The software itself comes on a CD-ROM and self-installs easily. It's widely available at retail and at the hrblock.com Web site. Alas, no Mac mentioned on the box, but if you want to donate yours to charity and switch to Windows, a Mac in good condition is worth $183.33
Questions and comments are welcome. Send them to Larry Blasko, The Associated Press, 50 Rockefeller Plaza, New York, NY 10020-1666. Or e-mail firstname.lastname@example.org.
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