Tax deduction is also available on contributions made in the form of merchandise, goods or services. However, this deduction can be claimed on the fair market value of these goods or services. For instance, you may decide to make a donation by gifting stocks of your company. In this case the value of the stocks will be calculated as the average of the highest and the lowest traded price on the date of valuation.
You can also donate your car. Its value will be calculated as the resale value at the time of donation. Planes and boats can be donated a well. However, if the claimed value of the donated motor vehicle, boat or plane exceeds $500 and the item is sold by the charitable organization, the taxpayer is limited to the gross proceeds from the sale.
If you are donating a household or personal item then the deduction can be claimed on the amount that the item would have fetched in a garage sale or at a flea shop. All charitable contributions over $250 need a proper receipt to qualify for tax deduction.
You must remember that only contributions actually made during the tax year are up for deduction. If you have used a credit card or issued a check, it does not matter when the transaction shows up in your account. You can seek deduction only in the tax year that you used the instrument.
So go on and keep a list of your generosity. The tax people would appreciate it. So would you.