Today’s tax tip is on charity non-cash contributions. A lot of people give goods they don’t need away thrift shops, churches, various charitable organizations. Of course, they need to be qualified general 501c3 organizations.
What I see most of all is the deductions estimated incorrectly. By and large, people undervalue clothes and they overvalue the other goods. So unless you know the exact value of the other goods, be sure to ask your tax professional.
You buy a couch for eight hundred dollars, sell it ten years later, and give it away ten years later. You’ll make maybe $100 or $250 max (if it’s in really good shape). Clothes, on the other hand, if you go into a thrift shop and look at the cost of the clothes, they range from $3 or $4 dollars up to around $15 depending on the item. Average $7 to $9. So when you give away bag of clothes how many articles are in there small bag maybe 20-25. A big bag maybe 30-3. Multiply it times the $7 to $9. That’s what you get per bag. Usually people make that very low when it’s much higher.
You can separate your donations into several several times throughout the year or all at once.