19 October 2010

Donate or Save ~ Use the Math

It's often hard to donate good stuff.  It just feels wrong; I mean, you spend good money on something you'd like to at least get a little bit out of it, right?  but sometimes you get MORE for giving it away than you would if you sold it.  How?  It's called a Tax Deduction!  So, how do you decide if an item is worth more to sell or to give away?  Let me show you:

The Salvation Army has a Value Guide for household items and clothes.   Let's do the math using a men's shirt for an example.  The Salvation Army says a men's shirt is worth anywhere from $2.50 to $12.00, and YOU get to decide the value (be reasonable).  If you donate a $6 shirt, you can deduct six bucks from your taxes ~ donate $200 worth of stuff: deduct 200 bucks from your taxes!

If you are in the 15% tax bracket, donating the shirt either reduces your tax bill by .90 ($6.00*0.15) or adds that much to your tax return!  You have to sell the shirt for more than 90 cents in a garage sale to make more by selling it than by giving it away.  If you are in the 25% tax bracket, it's worth even more to donate ~ $1.50!

I usually sell shirts for 50 cents, so donation is a way better deal for me.  I get rid of stuff in bulk, I don't have to store it for the next season, I don't have to spend as much time in the driveway bickering with people over the price of my husband's old jeans.  The trick is to keep a good record of what you donate.

How's that for Plain & Simple Math!

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