Turn Your Junk Into Tax Write-Offs!
Okay, well not “junk” per se, but the items you no longer want anymore. Unread books, itchy sweaters, those jeans you’re holding onto in hopes of fitting into them again one day! You unload a stockpile of those bad boys and you’ll not only de-clutter your life, but you’ll save a handful of dollars in the process.
The more you donate away, the more you can “write off” when it comes time to file your taxes. Kramer & Seinfeld may not understand what that means, but we all do! It means we can lower our taxable income for the year so that the government takes less of a bite from our hard earned money. So let’s say you donate $200 worth of clothing & toys from your house to the Salvation Army, and another $100 in cash to your favorite 501(3)(c) charity. Well, that generosity of yours will now save you from being taxed on $300 of your hard earned money last year! I don’t know about your tax bracket, but that would save me a good $75 easily.
Hot dogs! Now where do I sign up? Well, that’s where a little effort comes into play on your part. I won’t lie, it’s not going to be fun, but in the end it’s totally worth it if you like saving money ;) Here’s a quick 7 stop process I personally use when it’s time to get my act together:
1. Get pumped up. Down a gallon of coffee/soda/energy drinks, grab some large trash bags, and give yourself a good hour or two to get this party started.
2. Start rummaging! Go through your closets, drawers, guest rooms, basements, garages, anywhere you suspect unwanted items are hiding out collecting dust. Whenever you lock eyes on one of them, throw it in a pile and keep on going. The trick is to move full-force without getting distracted or into the sentimental-land. The second you catch yourself thinking about 2nd grade when your great Auntie Jo knitted you that furry bunny sweatshirt you haven’t worn in years, slap your hand and keep on going. The more you go down memory lane, the less motivation you hold onto.
3. Organize your unwanted items into 3 piles: The first – stuff you’d like to try and sell. Tax write-offs are great, but sometimes it’s hard to depart with a $200 object that you know you could get $75 for if you threw it up on Craigslist or eBay. And if you get no takers? Throw it into pile #2 – the items you’ll be donating to charity. This is the pile we’re more concerned with today as it’s giving us our beautiful write-off. Everything you’re giving away goes into large trash bags and/or extra boxes you have laying around. The third pile is for the trash – stuff you can’t really donate or sell because of the quality.
4. Scribble down what you’re giving away. You don’t have to get into hardcore details or anything, just write down everything you’re donating away – 5 t-shirts, 10 pairs of pants, 3 ties, a set of bowls, etc. Then, hit up a valuation site like ItsDeductible Online (a free service for valuing goods donated), and total up the amounts you’ll be writing off later. This whole process shouldn’t take more than 5-10 mins.
5. Throw these donations into your car and take off! The quicker the better too. Don’t be like me and hold them in the trunk of your car for 5+ months (true story, I literally just dropped them off last week). Besides the obvious problem of not getting those glorious tax benefits, everything rolls around whenever you take a turn! So please, as soon as you throw them into your car go and drop them off at their new home. And whatever you do, REMEMBER to get a receipt! This is very very important, without one you’re not getting squat.
6. Hold all your receipts in one place. The most annoying part about tax season is looking for all your receipts and W-2s, etc. Find a box, folder, tupperware, plastic bag, whatever – just keep everything in one spot so you know exactly where it is come go time. (Sanity is the one thing you can hold onto – don’t let the government steal that from you too!)
7. Get your tax write-off! When it’s time to file them away, grab the box or hand it over to your accountant, including the valuation notes you jotted down earlier (I like to staple them to the actual receipts so I don’t lose them) and voila! You just saved yourself some money AND helped out your community :)
Again, this isn’t going to be the most exciting thing you’ll do this year, but I promise you it’s worth it in the end. It’s like killing 3 birds with one stone – you de-clutter, you donate, and you save money! And if you’re really good, you do this a couple times a year so it’s not one major pain in the rear at the last second…when all you want to do is eat and be merry. So whatcha waiting for? Get out there and start donating!