Is Donating a Laptop Tax Deductible?

Mark Kennan, Demand Media writes: Whether you've replaced your laptop or just don't need it any more, giving it to charity can give it second life. In fact, some charities specialize in accepting donations of laptops and other computers. As a reward for your generosity, Uncle Sam might let you take a tax deduction.

Qualified Charity

Only laptop donations to a qualified charity save you money on your taxes. Qualified organizations include nonprofit schools, nonprofit hospitals, religious organizations and other public charities like the United Way. No matter how well-intended or deserving, giving laptops away to other organizations or any individuals can't qualify. For example, you could deduct a laptop donated to the Boys and Girls Club, but if you gave it directly to a needy student, you couldn't claim a deduction.

Fair Market Value

Donating might not save you as much money on your taxes as you expect because you're limited to deducting only the fair market value of the computer. The IRS definition of "fair market value" is fairly broad: the price that a willing buyer and willing seller would agree to when both know all the facts and neither needs to make the trade. So, chances are that your deduction is going to be a lot less than your original purchase price.

Tax Reporting

When you donate the laptop to charity, get a receipt that shows the name of the organization, date of the donation and a description of what you donated. On your taxes, you muse itemize to claim the write off -- if you take the standard deduction, your laptop deduction won't help you. Since it's a property donation, it goes on line 17 of Schedule A. If your laptop is worth more than $500, you also need to fill out Form 8283.

Tax Savings

The tax savings from your laptop donation depend on your tax bracket. While being in a higher bracket is generally a bad thing because you're paying a higher tax rate, it actually means your deduction saves you more money. For example, if you're in the 15 percent bracket, a $500 deduction only saves you $75. However, if you're in the 35 percent bracket, that same deduction saves you $175.