Donate, Instead of Selling:
Whether you’re short on time...or don’t want to deal with the hassle of selling all your unwanted items individually at a garage sale/Craigslist...or are scared to sell all of those old baby clothes online because of all of the horror stories you hear about people being robbed, etc...you may prefer donating your items in one swoop, rather than selling them one at a time.
Take what Uncle Sam gives you:
If you itemize deductions on your tax return, you can deduct the fair market value of items you donate. Then you’ll receive a tax benefit equal to your effective marginal tax bracket. The fair market value is generally the price at which you could sell an item at a thrift shop.
- Donate $2,000 worth of items
- Claim on your tax return and reduce taxable income by $2,000 (must itemize deductions)
- Assuming 25% IRS and 10% state marginal tax bracket, receive a $700 reduction in your tax liability
General advice to get the most for your stuff, in reasonable time:
Sell large ticket items; donate lower-value/high quantity items. For those with kids, that would translate into selling the $450 Bob Stroller, and donating the 150 pairs of socks!
Keep For Your Records:
- Donation receipt from charitable organization
- Photos of donated items
- Breakdown of what you paid vs. fair market value quantified for taxes
- ** Use this worksheet from our website’s client checklist/worksheets page to help.
** Only item you need to provide us for your tax return preparation. The rest are for your own records.
Read this article for more info on valuing your donated items.
Contact us with any questions...we’re here to help!