Your answer will affect how much in taxes you will save.
I don't recommend estimating the value of your donated items based on what they might sell for at a garage sale. In general, I believe garage sale prices are too low.
Instead, I recommend using one of several donation value guides that are available:
Turbo Tax Itsdeductible - Lists values of thousands of household items, clothing, games, etc. as either Medium or High value. They based their values on survey of thousands of thrift stores across the country. You can use it separately or as part of doing your taxes using Turbo Tax. As you check off items online, it adds up your charitable deductions and creates a record you can download.
Examples: Child's bicycle $20/$30; High chair $11/$15; Playpen $15/$23; Stuffed animal $3/$4; Puzzles $2.50/$4; Board game $4/$6; Card game $2/$3; Dice game $7/$10
See another article on Itsdeductible.
Salvation Army - Offers a printed form that lists values of 138 items, mostly clothing as either Low or High value.
Examples: Bicycle $5/$80; High chair $10/$50; Playpen $3.75/$30; Stuffed animal $.50/$1
Goodwill Industries - Offers a printed form that lists values of 66 items showing one value or a range of values for each item.
Examples: Stuffed animal $.50-$1; Puzzles $.50; Board games $1
Charitydeductions.com - Unlike all of the above free services, this one costs $29.95 per year. Like Turbo Tax Itsdeductible, you can enter items online where they are added up and easily downloaded. Values are based on over 20,000 items sold on Ebay. Their values are listed as Good, Very Good, Excellent and Mint.
Examples: High chair $7.80/$25.50/$51.05/$148.40; family games $2/$8/$15/$31.60; Puzzles $1.75/$5.55/$10/$21.95; Bicycle (no distinction between adult and child's bike) $20/$79.90/$188.90/$563.95
Which one is best?
I've used Itsdeductible for years for my personal taxes and have found it to be easy to use. The Salvation Army and Goodwill lists are very limited and would not be useful for most of the items you may be donating. Charitabledeductions contains many items, but I had a hard time figuring out how I would decide between all the valuation choices (4) for each item. I find it easier to use Itsdeductible with its simple Medium or High value options.
It would be nice if we could end this discussion of how to value donated items here. But it's more complicated, and the news is not good.
Normally, a person donating a used item to the Salvation Army or Goodwill would estimate a fair market value (say $20 for a used children's bicycle), based on one of the guides above, and deduct that as a charitable contribution on their IRS Schedule A Itemized Deductions form.
But, if you used the bicycle in your business, you must subtract from this fair market value the amount of any deduction you claimed on it for your business. So, if you bought the bicycle for $100 and deducted $100 as a business expense, you have nothing left to claim as a charitable donation.
If you deducted your Time-Space Percentage (lets' say 40%) of the bicycle ($100 x 40% = $40), the donated value ($20) is still less than the amount you deducted, so you still couldn't claim any charitable contribution.
As you can see, it's only items you didn't use for your business which are likely to be eligible to be counted as a personal charitable deduction.
IRS Publication and Form
The IRS publcation 561 Determining the Value of Donated Property says that you must use a "fair market value" to determine the value of your donation. A fair market value is a price the item would sell for on the open market. The publication is not very helpful in pricing your donated items.
If the total value of your donated items is more than $500, you must file IRS Form 8283 Noncash Charitable Contributions. You must put the name and address of the charitable organization. You also should have a receipt from the organization. I recommend taking pictures of the items before you donate them to a charity. Spread out all small items on a table before taking a picture.
Tom Copeland - www.tomcopelandblog.com
Image credit: www.scheduleapickup.com