Want to cut your clutter and cut your taxes for 2009 at the same time? According to tax experts, non-cash charitable donations are often overlooked. If you donate items you clean out of your stuffed closets and garage to a qualified charity, you can maximize the amount of this deduction. You can deduct the fair market value of the item at the time of the donation. So start digging out that junk (like the macramé plant hanger and sports equipment from high school) that hasn’t seen the light of day for years and donate it to your favorite charity! Start now so you have plenty of time to pace yourself through the next few weeks. Go through each drawer, closet and the garage and reap a nice big cut in your 2009 taxes. This is a great time to set up a schedule for yourself, maybe three closets per week, or five drawers a week, etc. This way, organizing your whole house becomes more manageable, and you have a better chance of being successful because you won’t be rushed.
Here are some hints on how to document your donations: make a list of each item donated (be honest with yourself here and trash the trash!), its condition (new, good, fair, etc.), the date you bought it and how much it cost (if you can remember!) and the fair market value. There is a book called It’s Deductible that is an excellent source of fair market values for frequently donated items. You can find it at http://cashforusedstuff.com. You can also ask your tax preparer or use your local thrift shop to get values on your used items. You may also want to photograph your donations for your records.
Something to be aware of, if you donate items valued at $250 or more in one day to one charity, you are required to obtain a written receipt or letter from the charity documenting your donation. This receipt must be in your possession by the time your tax return is filed.
Now that you know how valuable your clutter is to the taxman, make a late New Year’s Resolution to make money while getting organized. You and your wallet will be happy and you’ll be helping your favorite charity!
Barbara Ricketts is a Certified Professional Organizer (CPO). If you need assistance to simplify and organize, contact her at MessDoctor@Mac.com or call 661-263-0124.