tax breaks — December 29, 2014

Need Room After Christmas?

by Bobby Willover

Charitable Donation

It’s the day after Christmas and you’re probably recovering from one (or ten) too many Christmas cookies. Hopefully, you got everything on your wish list from Santa. Now it's just a question of where to put all the new and awesome stuff you received for Christmas. How about donating some of your old (but still in good condition) stuff to charity? You can make room for your new stuff, plus get a tax break for the items you donated. Sounds like a good idea, huh?

Donating New or Gently Used Items

Do you have clothes laying or hanging in your closet that you haven’t worn since the last President? That striped pant suit that look amazing on the mannequin? What about that jumpsuit for training for that marathon? (no judging here) It doesn’t have to be stuff that’s just laying around. There’s that "unique" sweater from your great-aunt. It doesn’t matter when you got it: if it’s in good condition, you can donate it to charity.

What’s it worth?

It’s worth the fair market value. That simply means what a local thrift store, Salvation Army, or Goodwill would be able to sell it for. Not the price you paid, but what someone would pay for it now. When you do donate your items, make sure you get a receipt for your donation stating what you donated and, if applicable, the quantity.

But what if I like all my stuff?

Maybe you like that reindeer-and elf sweater. That’s fine! You can make a cash donation to your preferred charity. Just keep in mind that, just like donating items, make sure you get a receipt for your donation. The receipt is especially important if you donate more than $250. Keeping those records and receipts will make it easier when you file your taxes here at 1040.com.

The Need-to-Know Stuff

Here’s what you need to know about year-end donations:

  • Donated items need to be in at least "good" condition
  • If you make cash donations (especially over $250), get a receipt
  • Keep records! It’ll help when filing your taxes

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