IRS Deductions for Charity Computer Donations

If you want to take advantage of tax savings by giving away a hard drive that you no longer need, consider donating it to charity. Computer donations are recognized by the IRS as tax deductable as long as the recipient holds the legal status of a non-profit organization. You can take the charitable contribution off of your taxes by itemizing your deductions through Schedule A of your IRS Form 1040. The amount of the non-cash deduction should be listed on line 17 of that form (if greater than $250).

Here are additional rules to follow when reporting computer donations on your personal income taxes.

  1. Rule#1 - Be honest; and smart - Always make a good faith effort to follow the rules and take the time to read through and understand all tax form instructions. The IRS will answer questions by phone if what you need to know is not explicitly stated on the form or in their other informational materials online.
  2. Rule#2 - Verify the charity - Computers donated for tax deduction purposes must go to an organization that is among those qualified under section 170(c) of the Internal Revenue Code. The IRS lists the various categories of organizations that are eligible here. The charity or non-profit you select should be able to provide proof of their status. Be aware that tax exempt does not automatically mean tax deductible. You still need to search the list that the IRS provides.
  3. Rule#3 - Prove deductions - Keep thorough documentation. Make sure the receipt you obtain from the recipient of your donated computer includes the name and tax ID# of the organization. It should also include the date, a description of the item(s) donated, and whether you received any goods or services in exchange for your donation. For items worth more than $5000, you must get a bona fide appraisal to prove the value amount you are declaring on your taxes.
  4. Rule#4 - Fill out the proper forms - For any deductions above $500, you must fill out Form 8283 with your federal income taxes in addition to Schedule A. For deductions above $5000, you must fill out Section B of Form 8283 and attach the independent written appraisal of the donated property.
  5. Rule#5 - Don't exceed allowable amounts - When you report computer donations on your itemized deductions, only fair market value can be used for the dollar amount. For general information on determining the value of donated items, see this guide from the IRS. If any goods or services were received in exchange for your computer, those amounts must be subtracted from the deduction total. The total should never exceed 50% of your adjusted gross income. In some cases (because of the type of recipient organization), the allowable amount cannot exceed 30% of adjusted gross income. With a few others, only 20% is allowed.
  6. Rule#6 - The donation year and tax year must match - If you make a donation after the New Year but before you file, the deduction needs to be on next year’s filing for the current year. For example: you donate a computer on February 7th 2010 and you are filing your taxes for 2009 on April 12th 2010. You must wait for the filing of your 2010 taxes in 2011 to take the deduction.

For more information on donating a computer, check out our Computer Donation Tips and Computer Donation FAQ.