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Message
Good Will Donation - Tax Deduction
Posted on 11/17/14 at 12:15 pm
Posted on 11/17/14 at 12:15 pm
I have a lot of old kitchen stuff that has been sitting in the attic and that I am looking to giveaway or sell. This includes pots/pans microwaves, blender, crock pot etc. All in pretty good shape.
Individually i could probably sell a this collection for $200-250 or so.
The other option I had questions about was donating it, to either good will or another non-profit and then writing these off as donations.
GoodWill has a "donation" valuation guide that is much more generous than I would value my items at.
Going by this guide Valuation Guide I could probably write off $500 towards my taxes when I itemize.
Obviously i would need to stay within reason on the write off's but i am just curious if anyone has suggestions on what would be the better route? Cash now, but deal with selling it, or possible more $ in tax write off, but deal with IRS?
Individually i could probably sell a this collection for $200-250 or so.
The other option I had questions about was donating it, to either good will or another non-profit and then writing these off as donations.
GoodWill has a "donation" valuation guide that is much more generous than I would value my items at.
Going by this guide Valuation Guide I could probably write off $500 towards my taxes when I itemize.
Obviously i would need to stay within reason on the write off's but i am just curious if anyone has suggestions on what would be the better route? Cash now, but deal with selling it, or possible more $ in tax write off, but deal with IRS?
8
Posted on 11/17/14 at 12:52 pm to cajuntiger26
I just donate my old stuff to Goodwill and take the write off.
Posted on 11/17/14 at 12:53 pm to WPBTiger
works for me...definitely seems like the easier process I just never thought of it until today.
Posted on 11/17/14 at 2:23 pm to cajuntiger26
Is there any way the irs could find out how much you actually donated to goodwill? It seems like it'd be the easiest thing to lie about.
Posted on 11/17/14 at 2:24 pm to TheIndulger
quote:
Is there any way the irs could find out how much you actually donated to goodwill? It seems like it'd be the easiest thing to lie about.
i'm sure it's red flagged for further review over a certain amount and i'd bet that amount isn't too high
Posted on 11/17/14 at 2:33 pm to cajuntiger26
Assuming you can already itemize deductions, on your income tax return, and you make less that 150K individual / 300K married, you basically save on your taxes whatever the value is, times your marginal tax rate.
So if you have a $500 donation and your rate is 25 percent, you save $125 in taxes, vs selling it for $200-$250.
So if you have a $500 donation and your rate is 25 percent, you save $125 in taxes, vs selling it for $200-$250.
Posted on 11/17/14 at 2:39 pm to cajuntiger26
The valuation guide provided by Goodwill is based on what they sell similar items for in their thrift stores. If you claim a deduction based on the values suggested by Goodwill it is unlikely your deduction will be challenged by the IRS.
Posted on 11/17/14 at 2:48 pm to Clint Torres
So what if they review it.. You say "oh yeah, that's correct, I donated all of that."
When I've donated at a goodwill they've only given me a blank receipt that you fill out on your own.
When I've donated at a goodwill they've only given me a blank receipt that you fill out on your own.
Posted on 11/17/14 at 3:26 pm to WPBTiger
quote:
I just donate my old stuff to Goodwill and take the write off.
Same here- I've had fairly good luck selling a few things on Craigslist, but most of the time, I'd rather just get it out of my house and take the write off.
You still have some time, so it can't hurt to take a couple of pictures and put it on Craigslist, but be prepared to deal with some trashy/shady folks.
Posted on 11/17/14 at 3:37 pm to LSUFanHouston
quote:
So if you have a $500 donation and your rate is 25 percent, you save $125 in taxes, vs selling it for $200-$250.
I believe you...but that makes no sense to me considering this is definitely not my area of expertise.
I can already itemize deductions.
Posted on 11/17/14 at 3:46 pm to cajuntiger26
I just save the receipts and deduct about 2,500 every year
Posted on 11/17/14 at 4:11 pm to cajuntiger26
quote:
.but that makes no sense to me considering this is definitely not my area of expertise.
The $500 donation is subtracted from your gross income. If you're in the 25% tax bracket, you would have paid $125 in taxes on that $500 ($500 x .25 = $125). What he's saying is that you can sell it for $200 or if you donate it with a $500 value, but it's only going to save you $125 on your taxes.
Effectively, it's going to "cost" you $75 to donate the items- so if it's worth it to you to take pictures of the items, list them on CL, field phone calls/e-mails, and ship/deliver/meet all the various buyers to get the extra $75, then definitely go for it. Otherwise, take the $500 write off and save $125 on your taxes.
Of course, all of this is assuming the value of the donation and the value of the items sold is actually $500 and $200, respectively.
Posted on 11/17/14 at 4:37 pm to cajuntiger26
$500 and less you don't even have to itemize. That's $500 aggregate for the whole year. And you really don't have to itemize them out on the return, just keep a record of it in case they ask. They really only ask if the deuction is a huge percentage of your AGI.
Posted on 11/17/14 at 4:41 pm to TheIndulger
quote:
When I've donated at a goodwill they've only given me a blank receipt that you fill out on your own.
Posted on 11/17/14 at 5:37 pm to The Spleen
quote:
$500 and less you don't even have to itemize. That's $500 aggregate for the whole year. And you really don't have to itemize them out on the return, just keep a record of it in case they ask.
Just to be clear, the $500 threshold is for filing Form 8283, which requires you to list out the donations and provide info. If your total donated items for the year to all entities is $500 or less, you just put the amount on Sch A and move on.
However, one has to be able to claim itemized deductions on Sch A to get any benefit of charitable contributions. There are a lot of people out there that don't realize this. They give 2-3K a year in charity, but rent and don't pay a ton of state taxes, so they file standard deduction, and get no tax benefit of the contribution.
Posted on 11/17/14 at 5:41 pm to LSUFanHouston
Very interesting...I appreciate it.
I should be over $1,000 in donations over the year.
I should be over $1,000 in donations over the year.
Posted on 11/17/14 at 6:05 pm to cajuntiger26
Technically the receiving organization must acknowledge the day of donation on the receipt or you risk upon audit, the dismissal of any claimed value.
Valuation is up to you for most of the stuff but I wouldn't claim highest value on everything.
It is also a great idea to have a picture of the stuff for backup. And if the audit gets deep, be able to account for what you paid when you acquired it.
They don't like it when your aunt dies and you haul any crap to goodwill and claim a deduction for stuff you never bought.
Valuation is up to you for most of the stuff but I wouldn't claim highest value on everything.
It is also a great idea to have a picture of the stuff for backup. And if the audit gets deep, be able to account for what you paid when you acquired it.
They don't like it when your aunt dies and you haul any crap to goodwill and claim a deduction for stuff you never bought.
This post was edited on 11/17/14 at 6:53 pm
Posted on 11/18/14 at 1:09 am to cajuntiger26
I still find it odd that goodwill s allowed to operate as it does. It's not a charity BUT they give you blank paper to add your donations on. So even though I think their corporate model is scummy, I like that I can get a mark up on "donations"/
Posted on 11/18/14 at 6:53 am to LSUFanHouston
quote:
Good Will Donation - Tax Deduction
quote:
$500 and less you don't even have to itemize. That's $500 aggregate for the whole year. And you really don't have to itemize them out on the return, just keep a record of it in case they ask.
Just to be clear, the $500 threshold is for filing Form 8283, which requires you to list out the donations and provide info. If your total donated items for the year to all entities is $500 or less, you just put the amount on Sch A and move on.
However, one has to be able to claim itemized deductions on Sch A to get any benefit of charitable contributions. There are a lot of people out there that don't realize this. They give 2-3K a year in charity, but rent and don't pay a ton of state taxes, so they file standard deduction, and get no tax benefit of the contribution.
That's a piece of the tax code I'd love to see change. Get a damn charitable deduction available to non itemizing filers. So many lower income, non itemizing filers give a significant portion to charity and see no tax benefit from it.
Posted on 11/18/14 at 7:28 am to Napoleon
quote:
I still find it odd that goodwill s allowed to operate as it does. It's not a charity BUT they give you blank paper to add your donations on. So even though I think their corporate model is scummy, I like that I can get a mark up on "donations"/
That's a very interesting point. I actually would MUCH rather give these items to a local charity, but I am even more unsure of how the receipt process would work. I hate the Goodwill model since it's not really a charity.
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