Non-Cash Donations
As I've always explained, the popular belief that everyone cheats on their taxes and underpays is 180 degrees off the mark. Most people don't claim all of the legitimate deductions to which they are entitled, resulting in grossly overpaying taxes.

Financial data can be captured with a good bookkeeping system, of which QuickBooks is the easiest and most efficient.

Non-cash transactions are a little trickier to keep track of. I am constantly seeing people claim zero on their tax returns for non-cash donations. They always tell me that they did give things away, but didn't keep track of it. What we end up doing is using guesstimates, which I am sure are grossly understated.

For several years, there has been a company that has produced a workbook called ItsDeductible to help people track their non-cash donations and assign proper values. A few years ago, they added a computerized version. H & R Block has even come out with its own version of this kind of program, Deduction Pro, selling to the public for the same $20 price.

I haven't done a side by side comparison of these programs to know first hand which is superior. Both of them appear to produce the official IRS Form 8283 for non-cash donations, which can then be given to the user's tax preparer.

However, the It's Deductible has been around much longer. It was also recently purchased by Intuit, which has plans to integrate it with its Turbo-Tax programs. According to the latest news, there are no plans to have It'sDeductible integrate with Intuit's professional tax prep programs (Pro Series and Lacerte) for the 2003 tax program; but I am hoping this can be done for 2004 because we use Lacerte for all of our tax returns.

ItsDeductible does have volume discounts for tax professionals to buy ten or more copies at a time to give or resell to their clients.

Special offer for our tax clients: We have long been trying to get more of you to computerize your records. If any of our clients are willing to use the computerized ItsDeductible to keep track of your non-cash donations for this year (2003), I will buy a bunch of them and give you the program on CD for free. If you use it properly for 2003, I will also provide you with a copy of the 2004 program, and so on. Any of our tax clients who are interested should send me a request to the top secret (currently spam free) email address that we have provided you to use in communicating with me.
- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 9/07/2003 04:47:00 PM Send this post: