The Donation Tax Deduction: Don't Throw It Away!
Is your closet bursting at the seams? Do you have more toys, games and gadgets than you and your family can ever possibly use? The end of the year is a great time to declutter your home and make room before holiday gifts arrive. But don't just dump all of those old items. Use them to your benefit. You can also take advantage of the charitable donation tax deduction and find other ways to benefit from items you no longer use.
How to Declutter
Organization expert Marie Kondo has built her philosophy around the idea that you should only keep items that spark joy in your life. If you have clothes you don't enjoy wearing or that no longer fit, now's the time to remove them from your closet. Set aside a weekend to go through your home and sift through items taking up space that you rarely use. Separate the items into piles of trash, recycling and possible donations.
Finding the Right Charity for Your Donation
Depending on what type of clothing or household items you're donating, some organizations may be a better fit than others. For women's work attire, a charity such as Dress For Success can help ensure your donations are given to those who need specific clothing items. If you're not sure of the best place to donate, websites like Zealous Good in the Chicago area can help direct your items to a charity in need.
Maximize the Tax Benefits of Your Donation
If you typically itemize deductions on your tax return, then you'll need to maintain written records detailing the items you're giving away, according to the IRS. The amount of information required varies according to the value of the donated goods. In general, for property valued at less than $250, you'll need a receipt from the charitable organization stating its name, a description of the item donated and the date of the contribution. To ensure that the charity you select is qualified to receive donations, use the IRS exempt organizations select check online tool. You'll also need to place a value on your items, such as a current thrift shop value, for tax reporting purposes. As a starting point, you can check the Salvation Army's Donation Value Guide to obtain a suggested price range for your used items.
Sell Items for Cash
If you're not going to take a tax deduction on your old clothing or other items, you can consider selling them for cash. Consignment shops will give you some money for gently used items, but you can also try selling clothing online. Websites like Poshmark and Tradesy cater to those interested in designer brands. You may also wish to try selling clothing or household items through an auction site such as eBay. Take pictures of your items and be honest about the current condition when asked by potential buyers.
Rather than feeling overwhelmed by the amount of stuff in your closet, try to set a plan for how best to dispose of items or find a way to repurpose them. Don't just dump everything in the trash. Recycling, reusing and donating is a much more environmentally friendly way of discarding items – it can put some much needed cash in your pocket and also help others in need.