Works For Me: Tax Deductions

WfmwsmallMay we all just pause for a moment to revel in the brownie points I’m garnering with Hubs by doing a post on this topic?  Tax deductions are my man’s love language.

Thirteen years of marriage to my clever husband have taught me that garage sales are a colossal waste of energy and money.  A few years ago, we started not only giving away unneeded items to a charity, but we began documenting our items very carefully–keeping a detailed list of what we gave, and even a photograph of each batch before we sent it off.

That may sound like a lot of work (it’s not, compared to a garage sale), but the benefits have been surprising.  The dollar amount the law allows you to claim each unwanted item for is WAY more than you could get for it at a garage sale.

That last sentence is the clunkiest thing I’ve ever written.  This is what happens when I try to discuss anything remotely math-related.  You know what I mean.  (For more info, see this software–it’s what we use to track it all.  You’ll be blown away by the value of your stuff, seriously.)

Basically, my point is that donating items to charity (instead of selling them in garage sales) is a major win/win:  the charity gets the benefit of your items and you get a fantastic financial benefit.  In fact, you might save just enough to…oh, I don’t know…pay for a hot pink Dell laptop for Christmas? 

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60 thoughts on “Works For Me: Tax Deductions

  1. Ronnica says:

    As someone who works for a non-profit tax place, that sounds like a good idea. People just need to remember that only works if you itemize, which I don’t.

  2. Laura says:

    You are correct! My husband and I have taken loads and loads of household items and clothing items to a local shelter. It has saved us so much time and we can actually document exactly what the items are worth! Great tip!

  3. Vickie says:

    Woo Hoo! I have finally left a WFMW post! I read your blog faithfully every day. I just re-started my blog and am going to try to stay with it this time. Keep up the awesome work Shannon! I am all for the tax deducts to our local charity this time of year.
    Blessings!
    Vickie

  4. Alexandra says:

    We do the same. Donating makes sense financially, and it’s helping others help themselves. I try to donate to the children’s hospital and rehab. shelter program thrift store. I also shop there too. πŸ™‚

  5. kelli says:

    Great post, Shannon! We’ve been doing It’sDeductible for two years now, maybe three? I dunno. But I DO know what a difference it’s made come tax time.
    I may even drag out the camera this year. Great idea!

  6. deputyheadmistress says:

    We were married over 21 years before we made enough income to justify itemizing. We never made enough to pay taxes in the first place, so we couldn’t use deductions. The yard sale cash was worth it to me then.=)

  7. Shalee says:

    Ahhh, finally a really great reason to continue my dislike for creating a yard sale. But, I have to say that Mr. Right and I discovered the benefit of keeping track of all our donations two years ago. We made some major money back without having to go insane during the sale.
    Two things: keep the receipts from the charities and as long as you don’t go over $500 (in government credit), you don’t have to have a really detailed list. But if you’re giving away more than that per year, then be prepared to prove your generosity.
    Excellent tip, Shannon!

  8. MomOnTheGo says:

    My accountant sent a newsletter with December tax tips just yesterday. It must be this time of the year. I need to check on the Canadian tax situation. Thanks for the reminder.

  9. Lori says:

    I never considered that before but it makes great sense! Now I really regret selling tons and tons of my stuff for a mere $300 at my moving sale last year. 😦 Love your blog!

  10. Hadias says:

    I have been donating to charities for year. One because have have obligated myself to do so and two because I learned a few years ago of the tax deductions involved.
    I am not found of having yard sales simply because the buyer expects you to sell your items for less than what they are worth, instead I take alot of gently used clothing to 2nd hand stores.

  11. Liz says:

    While you’re talking taxes (my love language too!) be sure to total your after-tax insurance premiums and medical expenses AS WELL AS medical mileage. And if you give to your church, your tithe and offering counts as a charitable deduction. Be sure your church secretary/treasurer gives you a printed list. The IRS just wants your stuff written down.
    love and hugs, your friendly tax pro blogger πŸ™‚

  12. The Junk Drawer says:

    I’ll never hold another yard sale again. I once inadvertently sold my husband’s Super Fantastic Christmas Tree Lights and haven’t heard the end of it.
    “Honey, where are my good lights? Oh, that’s right. You SOLD them for a dollar!”

  13. Ornery's Wife says:

    Shannon;
    We do both at our house. There are some things that people just really don’t want to buy at a garage sale, but donating them to charity helps them and gets rid of your stuff too. There are other times when the money generated from a garage sale is earmarked for some project or goal, and it is handy to have the “tax-free” income. Depends on how much stuff I have, too.
    Thanks for hosting WFMW. My winter cleaning spree is underway, so I have another cleaning tip this week. Happy Humpday!
    TM

  14. Heather L. says:

    Great tip! I donate a lot of items, but never take the time to fill out the tax form. I am usually just glad to be rid of the stuff. Maybe I should reconsider if it’ll get me a laptop! :o)
    Thanks for the tips!!!

  15. Dawn says:

    My Hubby is not a blog reader, but I sent him a link to this post. He is the Master of tax deductions and he will LOVE the Turbo Tax site. Thanks for the advice!

  16. Lorri says:

    My dh is in the financial field so we’ve been doing this for years too! And we’ve also thought how much easier this is than having a garage sale.
    My problem at the moment is a yrs worth of donations (hand written out)that I have sitting in a pile on my “to do” shelf. The software we have wasn’t up-to-date and so I haven’t entered any yet. I’m gonna check out the software you suggested. Thanks!

  17. Carrie says:

    Great tip if you make enough money to warrant deductions πŸ˜‰ With us being a family of 5 we don’t have to worry about it currently!!

  18. Robin (the pensieve one) says:

    Crud, Shannon, I messed up my first Mr. Linky link (PLEASE don’t shoot me :/). Is there any way you can delete it? I linked before I explained what today’s post is).
    Soooo, soo sorry for always messin’ up….:)

  19. SAHMmy Says says:

    Great tip! We do the same–don’t let that baby outfit go for 50 cents at a yard sale–you can claim the donation for $8 on your tax return! We do our taxes on the Turbo Tax site–it includes the deduction program.

  20. EEEEMommy says:

    I need to do this! I don’t bother with garage sales, but I haven’t taken the time to do this either. I just give it away.
    I am participating in WFMW for the first time! πŸ™‚

  21. bohgirl says:

    So, so, so right about the garage sale. BF’s ex-wife moved and left a lot of items that she didn’t care to see again…. so I was trying to save them for the spring for a yard sale. Why am I doing this? I literally have a huge basement full and the idea of making a $100, in consideration of all that work, doesn’t tickle my fancy one tiny bit. That’s it, I’m calling the Salvation Army!

  22. Candace says:

    We donate all of our stuff to charity too. Another benefit is that you get it out of your house sooner- as opposed to waiting until you have enough stuff to sell in a garage sale. We write a detailed list, but taking a pic too is such a good idea!

  23. Happy Geek says:

    Just a note to all Canadian readers, you can’t do this. Our system works differently! You might be able to wrangle a recipt for a large ticket item, but even then it is tricky to do. We were sooo dissapointed to discover this upon coming back to Canada!

  24. Audra Marie says:

    What a great tip! I have given a lot away recently to the Salvation Army, wish I had known this before then. I’ll definitely keep it in mind for the future. πŸ™‚
    Oh and it would be the sassy RED laptop. hehe

  25. Lisa says:

    This is good advice, and something we need to organize ourselves to do! We’ve deducted car donations, but never the nitty-gritty donations…

  26. jocomom says:

    We got some deduction estimating software with our tax software last year. You tell it what you donated and its condition and it tallys up your deductions. Handy if you ever use it.

  27. Lisa P in California says:

    So how do you determine how much the IRS says you can value an item at? That’s always my dilemna. If I think I can get $20 at a garage sale for an item that was $100 new, what value would the IRS place on it for deduction if I donate it??? Please help!

  28. elizabeth says:

    So here I am aimlessly watching CSI reruns, and I decide to check your WFMW. I’ve seen the software that you’re talking about, or something similar, and I think it unethically inflates the value of the donated goods. The deduction you take should be the value of the items — I think of it as what a reseller could get in the best possible type of sale — consignment shop for something that a consignment shop would take, thrift store prices if a consignment shop would turn you down, or maybe what it would sell for on e-bay.
    Same with cars — there are (or perhaps were — haven’t seen this lately) ads telling you that you could deduct the “blue book value” for a car that you donate (and implying that was the case even if the car didn’t run any longer), where the rules actually say that if the charity sells it (for example, at auction) the value is the amount they sell it for; if the charity uses the car or gives it away, you can take the fair market value — what you could realistically actually sell it for.
    Anyway, it’s a pet peeve, and that comes from someone who donates stuff to, and shops at, thrift shops all the time.

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