Maximizing Tax Breaks on Charitable Donations
Though it won’t earn you cash until the end of the year. But if you’re patient, donating your gently used items to goodwill or arc can help you at the end of the year around tax time.
From what my accountant tells me there is no minimum and no maximum. you just need to price them honestly, what you would pay for them at a garage sale(think $0.50-$2 clothes,$0.10 to $1 nick nacks etc).
I keep a box and notebook with a pen in the garage. Every time I find an item I want to donate I write the description of the item, what I paid for it and off to the far left what I believe its current worth is(think 5-10% of what you paid for it) I then fold or place the item in the box neatly.
when the box is full I donate the full box(keeping the notebook of course) I fill out the receipt, staple the descriptions for all the items for that particular donation box to the receipt and place in my tax write off folder where i keep all my records. I repeat this process over and over and at the end of the year turn in the folder to my accountant.
I might save $50-$300 on my taxes if I am lucky (but know others who do much better than that) but its still money that i didn’t have before. and good will or arc washes and marks up the item using all proceed of the sale of my gently used items for a great cause.
my method keeps everything painless and organized. I also put any receipts for charities i give cash/check contributions to as well as tax write off able memberships to the zoo /museums etc. Then the $50-$300 I save either goes back to charity or in our savings account.
This method won’t make you rich but it will earn you money. plus you don’t have to stand outside and try to sell your stuff(not that there is anything wrong with that, I still do that on occasion) you can have the benefit of getting something back for your gently used items while saving time standing outside trying to wait for a sale. I donate gently used kids cloths(since they grow out of them before they could ever ruin them) and holiday decorations I buy each year(cause i hate storing them).
Also whenever we move(which lately hasn’t been for awhile) instead of taking everything with us, I go thru it and donate a lot of stuff. this way I save on moving costs,since I normally rebuy most items like shower curtains,towls etc when moving anyway. I normally would start this process way before the move was planned…the sooner the better.
Editor’s Note: In that vein, a fellow TipHero suggested that now is also the best time to shop at thrift stores as inventory is likely to be at its peak. Click here to read the tip in full: Thrift Stores in Full Bloom