Happy National Thrift Store Day!
Non-profit thrift stores like Goodwill and The Salvation Army operate exclusively from donations of people in their community just like you. Most people usually think about donating clothes, but there are many more items stores are happy to take off your hands – plus, you’ll get a tax deduction! Here are some ideas to get you thinking next time you de-clutter the house.
- Furniture: Consider donating your couch or bed when you buy a new one, or perhaps finally get rid of the armchair that didn’t fit in your living room and now lives in the garage. Keep in mind, household goods must be in good used condition or better to qualify for a tax deduction.
- Electronics: From that keyboard that is collecting dust in your kid’s room to that iPod you never use anymore, you can donate! As long as the item is still in working condition, it may be able to be written off.
- Artwork: Donating a painting or sculpture can lead to tax deductions, too. Keep in mind, your tax deduction is equivalent to the market value price of the piece, not the price you paid for it. Special rules apply for certain items of artwork.
- Kitchenware: Clear out those old kitchen items that you never use, like dishes, pots/pans, and kitchen utensils. The “mismatched” dinnerware look is in, so plates are usually in high-demand. These all may be tax deductible when you donate them.
- Your Car: Many charities accept cars as a tax-deductible donation! Ensure the charity is a qualified organization with the IRS first. The maximum amount you can deduct on your tax return is the fair market value of your car, meaning the price a willing buyer would pay and a willing seller would accept for the car. Be sure to review all of the IRS record keeping and filing requirements ahead of time.
You must itemize deductions when you file your income taxes to be eligible for charitable tax deductions. TurboTax makes it easy for you through It’sDeductible, 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.
It’sDeductible continuously gathers pricing information from online and store surveys to determine fair market value. 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. For example, 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.
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. De-clutter, do good and get a tax deduction all in one.