Tax Deduction for a Donated Cell Phone

If you have ever replaced your cell phone with a newer model, chances are that you have a collection of old cell phones in your home. Even if you are preparing to upgrade your cell phone for the first time, there is another place for your cell phone besides a desk drawer or the trash can.

Donating a used cell phone to charity can help provide phones for those who can not afford them, or provide funds to a charity through the sale of old cell phone parts. In addition to doing something good for a charity, you can also claim the donation as a tax deduction on your taxes.

It is important to make sure that the cell phone is wiped clean of any personal information and files such as call logs, address books, text messages, photos, videos and anything else you may have stored on the phone.

The SIM card, if the phone has one, should be removed and the phone's physical memory should be cleared as well. Any expandable micro SD card should also be removed prior to donation.

The cell phone service for the phone should be canceled or disconnected before donation. This can be done by contacting the cell phone service provider. If you are replacing the phone with a new one, the carrier will switch over your account to the new phone. Do this before donating the cell phone.

A tax deduction for a cell phone is considered a deduction for a charitable donation. Due to this, the charity that you donate the phone to must be a 501(c)(3) registered organization on file with the IRS or an approved religious organization. The charity should be able to show documentation of this when requested. These eligible charities can range from schools and nursing homes to food banks and shelters.

When you donate any item to charity and want to claim it on your taxes as a deduction, you need to provide the IRS with the fair market value of the item that you are donating. The value is determined by taking the original purchase price you paid for the phone and subtracting 20 percent of that price for each year you owned the cell phone.

You can also use the IRS Resources to help determine the fair market value that you can list on your tax return. Publications 526 and 561 of the IRS's website dealing with Charitable Contributions and Determining the Value of Donated Property clarify tax deduction procedures.

A tax receipt will be issued by the eligible charity when you provide a cell phone as a donation. The tax receipt includes important information including the name of the donor, the charity, contact information and the date of the donation. Also a list of donated items (in case you are donating multiple cell phones) will be included on this receipt.

You must keep this tax receipt in your records in the event that the IRS audits you or requests a copy of this information. It is also a good idea to bring all tax receipts to your accountant during tax preparation to help determine where the deduction will be listed on your income tax return and to determine an estimation of what kind of deduction you will get.

Based on your tax bracket, other deductions, income and other expenses you may or may not be eligible to claim additional charitable donations. This means it is important that you hold on to any documentation of your cell phone donations and work with your accountant to determine if you are eligible to receive a tax deductions based on donated cell phone handsets.

Donating a cell phone to charity can also help the environment and reduce waste by keeping harmful components such as the battery out of landfills. Besides a possible tax deduction and doing something good for a charity, you may also be helping the environment by putting your old cell phone to use.