Tax Tip #15 - The Many Benefits of Donating
I thought I would take a few minutes to discuss the many benefits of donating, and how I firmly believe you should factor it into your life to some degree.
Let's jump right in.
I think that there are three main benefits to donating, and they go in no particular order.
First,it is a tax deduction.
As long as you keep track of your receipts, donate to "qualified organizations" and honestly valuate your items, you are most certainly entitled to write off these items on your taxes.
There are some limitations, but I usually donate between $500 and $1000 worth of money, items and so forth on an annual basis.
That makes for some decent tax savings.
Second,it is the right thing to do.
If you are fortunate enough to even be in the position to where you have unwanted items around your house, to me donating is the right, Christian thing to do.
I came from a very middle class upbringing.
We were by no means poor, but we certainly didn't have unwanted items piling up all over the place.
If you can do so, try to remember all the people out there who are less fortunate than you are.
Third,The De-Cluttering Effect.
Setting up some sort of donation system in your household can prevent your house from ever filling up with too much crap.
A "de-cluttered" house is a beautiful thing! Let me tell you the process that I go through before deciding to donate something.
First, I determine whether or not I can sell it.
Then, I try to find out if a family member or a friend is interested in the item.
And finally, if it still works or is still useable, it gets donated (trust me; this thought process takes all of about 10-20 seconds with most things).
A far as any tips and/or pointers on the donating part itself, here is what I have found to be helpful.
Donating only to a qualified organization.
Basically, this means to a church or the Salvation Army or a similar organization.
Giving two garbage bags full of clothes to your cousin Jimmy really doesn't count.
Valuate your items fairly.
Be careful here! I read somewhere that overvaluing donated items is a huge red flag to the IRS.
Most of your stuff will not be worth much, and if you use a "thrift shop" mentality, you should be fine.
When in doubt, go low.
And finally, save your receipts.
My donations to my church I always make with checks, so I have a paper trail, because the churches I have always been associated with were notoriously BAD when it came to keeping track of this.
Also, whenever I drop stuff off at the Goodwill, they always ask if I want a receipt.
I always say "yes" and immediately describe, date and value the items.
The receipt then gets tucked away in my "tax" file for the end of the year.
Donating is good for your soul, good for your house, and good for your wallet.
Why wouldn't you want to start doing it?
Let's jump right in.
I think that there are three main benefits to donating, and they go in no particular order.
First,it is a tax deduction.
As long as you keep track of your receipts, donate to "qualified organizations" and honestly valuate your items, you are most certainly entitled to write off these items on your taxes.
There are some limitations, but I usually donate between $500 and $1000 worth of money, items and so forth on an annual basis.
That makes for some decent tax savings.
Second,it is the right thing to do.
If you are fortunate enough to even be in the position to where you have unwanted items around your house, to me donating is the right, Christian thing to do.
I came from a very middle class upbringing.
We were by no means poor, but we certainly didn't have unwanted items piling up all over the place.
If you can do so, try to remember all the people out there who are less fortunate than you are.
Third,The De-Cluttering Effect.
Setting up some sort of donation system in your household can prevent your house from ever filling up with too much crap.
A "de-cluttered" house is a beautiful thing! Let me tell you the process that I go through before deciding to donate something.
First, I determine whether or not I can sell it.
Then, I try to find out if a family member or a friend is interested in the item.
And finally, if it still works or is still useable, it gets donated (trust me; this thought process takes all of about 10-20 seconds with most things).
A far as any tips and/or pointers on the donating part itself, here is what I have found to be helpful.
Donating only to a qualified organization.
Basically, this means to a church or the Salvation Army or a similar organization.
Giving two garbage bags full of clothes to your cousin Jimmy really doesn't count.
Valuate your items fairly.
Be careful here! I read somewhere that overvaluing donated items is a huge red flag to the IRS.
Most of your stuff will not be worth much, and if you use a "thrift shop" mentality, you should be fine.
When in doubt, go low.
And finally, save your receipts.
My donations to my church I always make with checks, so I have a paper trail, because the churches I have always been associated with were notoriously BAD when it came to keeping track of this.
Also, whenever I drop stuff off at the Goodwill, they always ask if I want a receipt.
I always say "yes" and immediately describe, date and value the items.
The receipt then gets tucked away in my "tax" file for the end of the year.
Donating is good for your soul, good for your house, and good for your wallet.
Why wouldn't you want to start doing it?