How to Track Drop-Off Donations for Tax Purposes

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I have wanted to do this post for a very long time but, unlike in the US, here in Canada we are unable to track the drop-off donations we bring to a thrift store for tax purposes.  As a result I really didn’t feel qualified to tell you how it’s done.  So I’ve brought in the best of the best.  Geralin Thomas. a very well known Professional Organizer in the US, is here to help simplify the matter for us.  I appreciate her time and attention to this post and I do hope you find it helpful.  Welcome Geralin!

Winter! The days are short, the nights are long and we tend to spend more time indoors – surrounded by our belongings. It’s the perfect season to rid our homes of unwanted stuff and by that I mean things that we no longer use, like, want or need.  Items like: clothes, handbags, luggage, furniture, decorative items, toasters, costume jewelry, or artwork to name a few. In other words, clutter.

Less clutter means more space and more unoccupied space means less time spent maintaining items; less time spent maintaining items means more free time to do whatever it is we want to do. As a professional organizer, one thing I feel confident saying is that very few of us, the well-organized among us included,  want to spend more time doing laundry, dusting, vacuuming and maintaining our ‘stuff.’ We want to hang out with our families and friends doing fun activities. Or, doing nothing at all. Fortunately, we have options.  Many options.

Options for permanently decluttering stuff include consigning or selling on eBay or a yard sale.  If you’ve ever hosted a yard sale you know they can be a lot of work. They are time consuming and aren’t always profitable. While

some folks think consigning and selling are well-worth their time and effort, others believe the opposite to be true. They’d much rather simply donate their stuff to a charity.

How to Track Drop-Off Donations for Tax Purposes

Donating goods not only helps us declutter, it also helps us financially by earning tax write-offs. Plus, in addition to earning a tax write off, it’s nice to know we are helping the needy while decluttering our closets, countertops and cabinets.

What to Donate:

Accessories, Shoes, Boots (belts, handbags, scarves, etc.)

What Not to Donate:

Gas Grills

Lawnmowers

Mattresses and Box Springs

Newspapers, Magazines, Junk Mail

Paint, Toxic Chemicals, Used Batteries

Weapons (ammunition, guns, knives, swords, pepper spray)

Limits and Itemization:

This information, from the Turbo Tax blog (September 12, 2012) helps clarify exactly how much can be deducted.

The limits for how much you can donate to charity don’t affect many of us. The deduction is limited to 50% of your income, and donations of property to certain organizations, such as veterans’ organizations, fraternal societies, nonprofit cemeteries, and certain private non-operating foundations, or to be used by an organization, are limited to 30% of your income. Unless the stuff in your closets is really, really valuable, those limitations probably won’t impact you.

To get a tax deduction for donations, you must itemize your deductions. That means your eligible tax deductions, must exceed the IRS standard deduction (in 2012, $5,950 if you are single, $11,900 if married, and $8,700 if head of household.)

Assigning a Value to Donations:

Fortunately, there are plenty of resources available to help us determine how much our stuff is worth.  Here’s a list of a few places:

In addition, both The Salvation Army and Goodwill have comprehensive valuation guides (click on the links to read them).

Finally, IRS Publication 561. Determining the Value of Donated Property. and IRS Publication 526. Charitable Contributions. are useful too.

Source: orgjunkie.com

Category: Taxes

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