Now that we’re in the thick of tax season — and on the heels of spring, too — this time of year serves as a good reminder of the benefits of decluttering. In today’s post, I’m talking about one benefit in particular — donating household goods to a qualified organization for a tax deduction.
And while it’s too late to donate items now for a tax deduction on your 2014 tax return, there’s no reason you have to wait until December to do the legwork. Get a jump on your 2015 return by following five simple steps:
Let’s take a closer look at the charitable contribution methodology to make sure you get the most out of tax season from here on out — and a clutter free home, to boot.
From cash and stocks to real estate and household goods, there are a variety of things you can donate, but since we’re shooting for a clutter free home in the process, let’s focus on those items that are probably taking up space in and around your house.
Just to give you a better idea, here’s a short list of some of the more popular household items donated that qualify for a tax deduction:
As you can see, if you own it, it’s probably a safe bet it can be donated for a tax deduction. There is a catch — these items must be in either new or excellent preowned (and working) condition at the time of donation.
This one’s easy to answer. From Goodwill and The Salavation Army to local schools and religious centers, checking out the IRS’s Exempt Organizations Select Check tool will make sure you and your donations are headed to the right place.
Since there is no fixed formula for attaching value to the items you donate, the IRS and qualified donation centers ask donors to value their items at fair market value. For determining an estimated value of your ready-to-donate household items, consult The Salvation Army or Goodwill Industries donation value guides.
If you claim an item is worth more than $500 but it’s in rough looking shape, an appraisal of the item will need to accompany your tax return.
If you have a car or truck taking up prime real estate in your garage or driveway and you’re thinking about donating it, you should know that its value is determined by how it’s used by the organization you donated it to. Auctions are a common practice. Fair market value is also taken into consideration for vehicles and, normally, the very least you’ll be able to deduct on a tax return for a donated vehicle is $500.
Once you’ve attached a fair market value to your donations and dropped them off, make sure you’re leaving with a receipt of the donation. This will come in handy when it’s time to file your taxes. If your donations total more than $500, you’ll need to fill out IRS Form 8283 for noncash charitable contributions. It’s also good to keep these records around should the IRS decide to audit your tax return. But let’s hope that doesn’t ever happen.
With the donations lone gone, there’s a good chance what’s left would look great getting hauled away in a Bin There Dump That dumpster rental. You can make that happen by contacting your local Bin There Dump That franchise operator.
So don’t let tax season sneak up on you again. Use this time of year to get a jump on spring cleaning, a clutter free home and NEXT tax season.