Works For Me: Tax Deductions
May 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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Posted by: Scott | Tuesday, November 27, 2007 at 10:47 PM
That sounds great to me! Just took 4 bags of my daughters rejects to Goodwill!
Posted by: ellen b | Tuesday, November 27, 2007 at 10:49 PM
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.
Posted by: Ronnica | Tuesday, November 27, 2007 at 10:54 PM
That's a great idea! We donate, but I never really know how to put the value on it. I will have to check out the software!
Posted by: Melissa Markham | Tuesday, November 27, 2007 at 10:55 PM
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!
Posted by: Laura | Tuesday, November 27, 2007 at 10:56 PM
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
Posted by: Vickie | Tuesday, November 27, 2007 at 10:58 PM
A hot pink laptop? So sexy!
Posted by: Michelle at Scribbit | Tuesday, November 27, 2007 at 11:12 PM
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. :)
Posted by: Alexandra | Tuesday, November 27, 2007 at 11:17 PM
AMEN! I keep preaching this delayed gratification concept, but my friends just keep sludging through the garage sales!
Posted by: stacey | Tuesday, November 27, 2007 at 11:33 PM
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!
Posted by: kelli | Tuesday, November 27, 2007 at 11:54 PM
I am SO drooling over that hot pink laptop, darn it!
Donations make you feel good, too! :)
Posted by: JCK | Wednesday, November 28, 2007 at 12:34 AM
we can't wait until tax time!!! but for now I have my hands full with diaper...yuckie, yuckie diapers.
Posted by: Kerith | Wednesday, November 28, 2007 at 12:52 AM
so sorry...i forgot to copy and paste...it must be too late...i gotta go to bed
Posted by: Kerith | Wednesday, November 28, 2007 at 12:55 AM
That's an interesting tip! What a cute laptop!
Posted by: Sheila at Dodging Raindrops | Wednesday, November 28, 2007 at 01:06 AM
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.=)
Posted by: deputyheadmistress | Wednesday, November 28, 2007 at 01:08 AM
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!
Posted by: Shalee | Wednesday, November 28, 2007 at 05:05 AM
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.
Posted by: MomOnTheGo | Wednesday, November 28, 2007 at 05:31 AM
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!
Posted by: Lori | Wednesday, November 28, 2007 at 05:33 AM
Posted by: Lori | Wednesday, November 28, 2007 at 05:33 AM
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.
Posted by: Hadias | Wednesday, November 28, 2007 at 05:36 AM
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 :)
Posted by: Liz | Wednesday, November 28, 2007 at 05:38 AM
Great post! I think I'm *finally* learning that tax deductions are easier after too many garage sales.
Posted by: Heather Jones | Wednesday, November 28, 2007 at 05:45 AM
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!"
Posted by: The Junk Drawer | Wednesday, November 28, 2007 at 05:52 AM
You're right, garage sales are way too much work! A friend of mine had one recently. She made $23 then ended up donating all her stuff anyway.
Posted by: Sarah @ Real Life | Wednesday, November 28, 2007 at 06:26 AM
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
Posted by: Ornery's Wife | Wednesday, November 28, 2007 at 06:30 AM