Giving Alert! Thrift Stores, Charities Need Your (Tax Deductible) Donations
With economic times being tough, your local thrift store is probably doing a brisk business selling clothing to shoppers who want to save money.
Unfortunately, it could also be running short of merchandise.
That’s because some people accustomed to donating are holding on to clothes in their closet longer or selling them on eBay, to save money themselves.
At the Salvation Army, sales nationwide increased during the summer while donations declined, according to a Sept. 10, 2008 report in The New York Times. Some individual shop managers even said they feared running out of goods by year’s end.
So if you’ve been meaning to donate stuff in the back of your closet or the corner of your garage, that news should give you some motivation.
Need more reasons to conquer your closet-cleaning procrastination?
Remember that your donations are tax deductible, as long as you itemize deductions when you file your income taxes. And keep in mind, that TurboTax makes it easy for you through It’sDeductible.
It’sDeductible is a nifty online service provided free to TurboTax customers. It lets you track your donations year-round, helps you determine their value, then imports the information into TurboTax when you prepare your income tax return.
The IRS requires that you list the “fair market value” of all your donations (yes, each and every outgrown t-shirt and stuffed animal). That value is what the items would fetch in thrift stores, resale shops and online auctions.
It’sDeductible continuously gathers pricing information from online and store surveys.
Even though market values are typically far less than items cost when new, you might be surprised at how quickly your castoffs can add up to several hundred dollars.
A pair of men’s khaki pants, depending on the condition, could be worth $6 to $8 each. A full-sized Bratz doll would snag you a $6 to $10 deduction.
To meet IRS requirements, your donations must be in good condition. They also must be fully itemized and valued, given to a legitimate charity and the charity must provide you a receipt every time you donate.
So take your mind off the economy: De-clutter, do good and get a tax deduction all in one.