This year, many people find themselves in a position were donating money to charity just doesn’t seem like a good idea given their current situation. But, there is still a way to help without spending a cent, and as a bonus, you can save on your taxes at the same time.
Many charities run thrift stores. If you haven’t thought it through all the way, it works like this.
Someone donates a dresser. The dresser is worth $40. The charity puts it in its thrift shop with a price tag of $30. Someone buys the dresser for $30. Since the item was donated, the entire $30 is profit (minus the cost of running the store.) So, it is like donating $30 in cash. As a double bonus, it is possible that the person shopping in the thrift store is also having a tough time this holiday season and getting a good deal on a dresser can benefit them as well.
Here is the great part for your pocketbook. You get to deduct the $40 from your taxes. If you are in the 30% tax bracket, that is like getting $12 from Uncle Sam.
Sure, you could have sold the dresser yourself. Of course, you’d have to find a buyer, and that means putting an ad somewhere and then taking phone calls and letting people look at it, all of which maybe add up to more time that you don’t really want to be spending on selling the dresser. Keep in mind, that with the $12 rebate from the IRS, selling the dresser for $40 really only gives you $28 profit. (The $40 you would get for selling it, minus the $12 tax deduction you won’t get.)
Helping Charity No Cost No Effort
A lot of these non-profit groups will even come and pickup the items from your home. You can just set them on your sidewalk or porch and sometime during the day, they’ll come and take it all away for you. No work for you, just a tax deduction and the good feeling of knowing you are helping out for the holidays.
Keep in mind that many of these charities used to randomly call people to ask if they had anything to donate, but many have cut back on doing that because people don’t like getting the calls which they equate to telemarketers. So, you need to call them.
I know that these organizations will come to your house and pickup your extra items. Make sure you tell them whether you are donating clothing or larger items. Usually that is two separate trucks. Which is just fine, because that is two separate receipts as well.