This summer, one of my big goals is to declutter my house and actually get rid of things. I have had a bin of clothes to donate sitting in my office for I don’t know how long, and at this point, it’s overflowing. I also know there’s a box of donations in the back of the coat closet. That stuff is probably going to have to be washed, because I’m fairly convinced one of the cats has been sleeping in it.
I’ve also got a ton of paperback books that I need to get rid of. Don’t worry, library fans. I’m keeping quite a few books, but there are a number of books that it’s time to part with. I won’t end up reading them again, so why hang onto them?
When I have taken items to donation centers in the past, I haven’t bothered with getting a receipt. It seemed like too much work to log everything I donated and then enter it all into my taxes. But I decided to give it a shot this year. I always itemize my deductions, so why not?
But how do you figure out what your items are worth?
Goodwill provides a value guide to use when figuring out what your items are worth. If nothing else, it’s a starting place to decide whether or not it’s worth it to you to even record the donations.
I use TurboTax to do my taxes, and I use the ItsDeductible program to track all of my cash donations, so I decided to check it out for physical donations as well. The site is awesome. For donations of “items,” you can log the date and location of your donation and then search for the type of item to log it. My last donation included 19 pairs of pants. So I did a search, found women’s pants, and logged them in. The program gives you the option for high value or medium value. I have listed all of my items as medium value. Even though some of the clothes are still new with tags, I figured medium value was the easiest option. Those 19 pairs of pants? They’re worth $114 in deductions!
Of course, I don’t know how this is all going to play out when I do my taxes. I know that deductions totaling under $500 require less paperwork, and I’m going to be over $500 for the year. That means I will have to fill out form 8283. I know that deductions over $5000 require significantly more paperwork and there is no chance of me being in that range. So my current plan is to continue to donate and then wait and see how it plays out on my taxes. I’m hoping that itsDeductible will take care of most of it for me. And I am making sure to get a receipt and keep a detailed list of the items donated with each receipt.
If you already have your taxes done by a professional, then absolutely, keep track of all of your donations! Make sure you have good receipts and notes on what you donated. That’s the key.
I figure that in the worst case, I take a deduction of under $500 and I have cleaned out my house and done something good for a great organization. Still seems like a win-win situation for me.
Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.