donating vs selling

[Sagginit]

everyone says to just donate used clothing etc and take the tax deduction. last year when i did my taxes the program advised me to take the govt single deduction over my charity donations as it was larger. i don't get how anyone donates thousands of dollars of items a year does this work better when you file taxes as a family? am i missing something?

 

[stsomewhere]

We donated a old vehicle to Boy scouts.

 

[littleelf]

Donating a big item likea car would help, but be careful about overestimating the value of what you donate. I work in a library, and we get donated books all the time. We give a receipt for the # of books only. But those books are really worth 50 cents or less each--what we sell them for at our book sale. Half of what we get in donations gets recycled and so is worth nothing.

There are websites that can estimate worth of donations for you. Goodwill has a document here: http://www.goodwill.org/get-involved/donate/taxes-and-your-donation/

You can only deduct the fair market value of the item--what someone would realistically pay for it used in its current condition, not what you paid for it new.

I agree it would be hard to get a deduction high enough to make a difference through donating small household items.

 

[disykat]

Clothing donations alone won't come anywhere NEAR the generic deduction. However, for people that give large enough amounts to other organizations and have other things that cause them to exceed the standard deduction it really adds up.

That said, we exceed the standard deduction but I rarely bother keeping track of clothing donations. Anything I donate is worth so little.

 

[KennesawNemo]

I think for those whose itemized deduction is bigger than the standard deduction, it makes sense to donate. However, for most people, donate clothing alone won't make your itemized deductions bigger than standard deduction. You need to have other deductions so that you can add up, like mortgage interest, tuition, business spending.....

 

[jiminykrikkit]

I collect everything we want to get rid of throughout the year, then have a garage sale. Whatever doesn't sell at the garage sale, I take it to the resale shop where they buy it from me/give me cash for my stuff. Whatever they don't want gets donated to Goodwill.

We used to take a photo of every item we were donating to help keep track for tax time, but it wasn't ever worth it to do an itemized deduction.

We've never donated anything large like a car, mostly just clothes or old household items.

 

[MichelleinMaine]

Donating a big item likea car would help, but be careful about overestimating the value of what you donate. I work in a library, and we get donated books all the time. We give a receipt for the # of books only. But those books are really worth 50 cents or less each--what we sell them for at our book sale. Half of what we get in donations gets recycled and so is worth nothing.

There are websites that can estimate worth of donations for you. Goodwill has a document here: http://www.goodwill.org/get-involved/donate/taxes-and-your-donation/

You can only deduct the fair market value of the item--what someone would realistically pay for it used in its current condition, not what you paid for it new.

I agree it would be hard to get a deduction high enough to make a difference through donating small household items.

In my experience, people tend to underestimate what can be claimed for the deduction. The books for example- folks would think "oh the library sells them for 50 cents or I saw a yard sale with 10/$1..." but- that is below what Goodwill sells them for (locally, anyway- most hardcovers are $2-3 and paperbacks a dollar or two.) Per their donation guide, that is a fair market value.

Likewise, people try to sell clothes at a yard sale and then opt to give to GW at the end. Adult shirts/pants well for $5- that too is fair market, even if you couldn't sell that at a yard sale.

Totally hear you, by the way, on not being able to use donations. I also used to work for a library-- we finally put "please do not give us Readers DIgest condensed books, encyclopedias or outdated medical books."

DH works for Goodwill- the money they need to spend on trash pickup, because people have donated broken, moldy, or otherwise totally unusable things is crazy!

 

[Kathryn Merteuil]

I just donate it to get rid of it. I do not fool w/the trying to do the tax deduction, because like you mentioned I am always advised to take that standard deduction thing.

 

[shoney]

About 5 years ago, my husband was getting rid of his 99 Ford Ranger. We had donated a car years ago and received a nice deduction from it. I called the acct to see if we should donate. She said that because the laws have changed we would only net about 75.00! We stuck a "for sale" sign on it and sold it for 600.00....I would have taken less to just get it out of my driveway...ssshhh...LOL

 

[Happyjen27]

For me, there are 2 intrinsic values to donating that aren't captured in the tax write off.

1. Time
2. Even people in a rough neighborhood (where I grew up) deserve name brand, cute clothes for their kids and themselves. Where I donate, they aren't resold, they are distributed. Which means that some mommy is very happy their baby is wearing babyGap and Gymboree.

I might not be hitting my mark tho, is there a standard deduction for donations? Or, is the standard deduction you're all talking about for all itemized things (like mortgage interest, etc?). I hate to be missing a chance to save money!!

eta: By Time I mean the time it would take to sell my stuff. I work full time, my weekends are like GOLD. Taking a weekend to sell stuff and raise $500 bucks is not worth it to me. I'd rather donate and have fun during the weekend instead. Even if the tax savings is only $300. (generally my donations are worth about $1000.00 according to the government, so I save roughly $300 in cash)

 

[crisi]

I'd have to look at my records, but last year about 20 suits went from my closet to a place that helps the unemployed get jobs. We gave away something like 300 books. Two dressers and two desks. A year worth of two kids outgrowing their clothes. Two outgrown bicycles. We did a rather large purge to charity last year, and it was a few thousand dollars market value (we use the midpoint on the Salvation Army charity guide for everything). But it adds up fast.

We do itemize - just our state income tax deduction is big enough to make it worthwhile to itemize. And we are in a high tax bracket.

 

[danceintherain]

It really depends on your income and the total number of things you CAN itemize. Once you reach a certain point, it starts making sense to claim everything possible, because every little bit helps, but it takes quite a bit to get there. The next time you look at your taxes, look at all the possible categories you can put things into....that will help give you an idea of the possible things people can itemize and how it might benefit others to do so rather than taking the standard deduction. If you're looking at claiming a couple hundred dollars worth of clothing donations, and that's it, then it's not going to get you over that thresh hold.

 

[joeyrose]

i itemize deductions. about three years ago, i was preparing for a total house remodel and donated tons of stuff including many mint-in-package toys and collectibles. i kept all the receipts and had to fill out some additional form as the total was well over the limit on schedule a, something around $6k in non-cash donations involving tons of clothes, dvd's, household items, and mip toys and mip collectibles. i saved about about $2500 in state and federal taxes that year. it was worth it to me and pumped some really nice stuff into the community.

 

[clm10308]

For me, there are 2 intrinsic values to donating that aren't captured in the tax write off.

1. Time
2. Even people in a rough neighborhood (where I grew up) deserve name brand, cute clothes for their kids and themselves. Where I donate, they aren't resold, they are distributed. Which means that some mommy is very happy their baby is wearing babyGap and Gymboree.

I might not be hitting my mark tho, is there a standard deduction for donations? Or, is the standard deduction you're all talking about for all itemized things (like mortgage interest, etc?). I hate to be missing a chance to save money!!

eta: By Time I mean the time it would take to sell my stuff. I work full time, my weekends are like GOLD. Taking a weekend to sell stuff and raise $500 bucks is not worth it to me. I'd rather donate and have fun during the weekend instead. Even if the tax savings is only $300. (generally my donations are worth about $1000.00 according to the government, so I save roughly $300 in cash)

I really agree with this.
I have done garage sales before, but it was a big pain in the rear. Our neighborhood only allowed garage sales two specific days per year which may or may not fit into the rest of our schedule. Plus I hate dealing with certain people that want to buy for pennies and then take all the stuff to a flea market to resell.

When we moved, I could have made a good bit by selling all the furniture and household items I was getting rid of, but instead I gave it all away to a refugee resettlement program. When the man came to pick up all our stuff(took 4 van loads over 3 days) he said that what is usually donated is just garbage, and he was very appreciative that what we donated was in good condition.

 

[Pesky]

Have to agree that the decision to donate versus sell depends on two things:

1. Your dedication to the cause -- do you want to give to this certain charity regardless of how much you see back in tax write-offs?

2. Your time. Selling items yourself, whether by CL, yard sale or other methods often involves a significant investment of your own time and effort. If you prefer to not deal with that, donation is the way to go.

I've also found that the tax write-offs I get for donations rarely amount to much. But it's more about the two things above. Like instead of selling the kids' toys, I tend to donate to the locate child advocacy program who distributes them to needy kids.

 

[Karenj2]

everyone says to just donate used clothing etc and take the tax deduction. last year when i did my taxes the program advised me to take the govt single deduction over my charity donations as it was larger. i don't get how anyone donates thousands of dollars of items a year does this work better when you file taxes as a family? am i missing something?

I think for those whose itemized deduction is bigger than the standard deduction, it makes sense to donate. However, for most people, donate clothing alone won't make your itemized deductions bigger than standard deduction. You need to have other deductions so that you can add up, like mortgage interest, tuition, business spending.....

We give to alot of charities (in cash donations) already, so it makes sense to itemize our physical donations as well. Two years ago we itemized some furniture that we gave to a local charity. We probably could have made quite a bit on it, but we liked knowing it was going to a truly needy home. (No offense to Goodwill, but I know too many rich people who shop there - I give to local charities that I know will give the items to needy families.) My tax rep said that we could just take up to the allowable amount without a receipt - beyond that we'd have to add up the fair market value.

 

[bethy]

We donate stuff (and cash) because we want to help others and spread the love. The fact that doing so involves far less time and hassle than selling the same stuff is a bonus.

And yes, we do also take an itemized deduction while we're at it.

 

[Pigeon]

I'm actually always amazed by how much we can deduct for clothing, books, etc. Itemizing is always better for us than the standard deduction, and donations are just gravy.

We use It's Deductible to value the donations. Keeping track of what we donate is easy.

 

[snarlingcoyote]

It comes down to an individual's specific set of circumstances whether a garage sale or donation of household goods is better for the individual at tax time.

We have a mortgage, so, of course, we itemize. I use Itsdeductible.com to track my donations and let the website assign fair market value and match that to my donation reciepts. I also donate to charitable organizations through Paypal whenever I can, which makes it easier for me at the end of the year to tot up dollar donations!

 

[crisi]

Other reasons this works for us.

I'm a cheap garage saler. There are probably bargains galore at one of my garage sales, because I hate to label anything over $1. (A few things, but it isn't common). And I'm not in a good garage sale neighborhood - people don't buy around here at high prices. So I will label a good pair of pants for work $1 and sell them (or maybe not) at a garage sale. Or I can donate those same slacks, the Salvation Army valuation guide will give me a low price of $3.50 and a high price of $12. I value everything at the midpoint, and write off $7.75. My marginal rate is 33%, so I have $2.55 in my pocket.

Since I'm already itemizing our taxes, even if I donate a single bag of clothes all year (not enough for a garage sale), I'm coming out ahead.