Turn Your Charitable Donation Into Tax Savings

Long before "Cash For Clunkers" or "Cash Forto work everyday. He needed at least 5 suit jackets
Appliances" we had Cash For Trash. Donating yourand certainly couldn't afford new dress clothes.
unwanted things to charity is a very easy way toCarl went to the Goodwill store with his fingers
potentially reduce your tax liability and lead to a largercrossed. With the store attendant's assistance Carl
tax refund. For example, if you received a gift forwas able to find enough suit jackets to meet the dress
Christmas this year that replaced an older item youcode! His bill came to $40.00 for 5 jackets. Someone's
already owned, think about donating that item beforecharitable donation was going to make a big difference
discarding it. What you consider to be junk may 1) be afor Carl.
much needed and useful item to someone else and 2)How do I make sure I am getting the full value of my
be a tax deduction for you.deduction?
3 great ways to benefit from your unwanted things.1) Be sure that you get a receipt for the value of your
Here are the best three things you can do to get moredonation. It doesn't necessarily have to be a formal
value out of your unneeded / unwanted stuff.document but you should get something in writing from
1) Give your item to a family member or friend whothe charity stating the value of the donation and the
you know can use it. The satisfying feeling you willdate on which you donated it.
receive in return for helping out someone you care2) Also note that, according to the IRS website, if the
about is even better than reducing your taxes.amount of a taxpayer's deduction for all non-cash
2) List your items for sale on as many free or nearcontributions is over $500, a properly-completed Form
free mediums as possible. The Pennysaver, Craigslist,8283 must be submitted with the tax return.
the Green Sheet, and even many newspapers offer3) The IRS advises that in order to get credit for your
free advertising, within certain dollar limits. If you arecharitable deduction you need to itemize your taxes.
simply looking to get as much money out of the itemHave your tax advisor run some numbers before you
as possible you may find an individual or entity willing todecide whether to itemize or go with the "standard
pay more than the potential tax reduction value.deduction". If your deductions add up to less than what
3) Give your item to a qualified charity. The IRS allowsyour standard deduction would be then there is no
you to deduct the current value of your useable andadvantage to itemizing.
functional donation from your itemized tax return. TheIt is important to become familiar with all the tax
Salvation Army provides a thorough list of typicaldeductions available to you, including qualified charitable
donations and their monetary values on their website.donations. Arranging your financial affairs, around IRS
-If you have a unique item to donate and are unsureapproved deductions, could give you an advantage
what the value should be listed as you can alwayswhen considering your overall tax liability.
stop by a consignment shop or auction house and askCan you turn trash into cash without the IRS?
for an appraisal. You can also use online sources - seeA different way of thinking about this topic is turning
below.someone else's trash into your cash! We've discussed
-Want to know if your charity is considered qualifiedgiving your unwanted things away but is there
by the IRS? Use the tool listed belowsomething you can do with the things discarded by
-Of course this option does bring more than a potentialothers?
tax reduction. You are helping someone in need.When I was a kid my dad would take my brothers
Your donation does make a difference in someone'sand I to the rifle range in East Butler. After all the adults
life - a true story.were done target practicing my dad would send us to
Carl was looking for work and struggling financially. Hethe end of the range to dig out all the lead that had hit
was ecstatic to be hired as a salesman at a localthe side of the hill. We filled up small buckets each
appliance store. Carl worked hard every day to makeweek. He took that lead, as well as the discarded
the customers and his boss happy. It eventually paidbrass cartridges, and used these free raw materials to
off when Carl's boss promoted him into a salesmold and then reload new ammunition. He used some
manager position!for himself and sold the remaining ammunition to others
Even though Carl smiled widely and graciously thankedthus providing him cash from a bucket of lead trash.
the boss for the promotion he was secretlyTake a walk around your house and neighborhood. Is
concerned about the manager's dress code. As athere trash you can turn into cash?
manager he would be required to wear a suit jacket