Donation as Tax Deduction can Result in Big Savings

by Redeeming Riches on April 7, 2015

donation-as-tax-deductionsYour spring cleaning activities may result in major tax deductions that have the ability to result in big savings. Now that spring has officially sprung, individuals everywhere are opening up their windows in order to let that fresh, sweet-smelling air into their homes. Immediately after opening up those windows, you should start opening up your storage room, your attic, your basement, your closets, your drawers, and your pantry to uncover donations that could lead to tax deductions, which will save you a lot of money! From the can goods in your pantry to clothing that has seldom been used to sporting goods – it is easy to turn your spring cleaning activities into a tradition that allows you to give in order to help others. In helping others, you, ultimately, help yourself. It has been established that charitable donations to certain organizations may be deducted when you file your income taxes, which assists in lowering your taxable income. Non-cash donations may be deducted up to 30%. In this guide, you will learn how your spring cleaning donations may result in tax deductions and big savings.

Household Goods

When spring cleaning, it is likely that you will stumble across a large amount of household goods that you no longer need. Instead of throwing these items away, you should donate them to qualified organizations. According to the tax law, you are permitted to donate household goods at the estimated value that they are at the time in which you donate them. Thrift stores, hospitals, charities, schools, and churches accept household goods as donations so that they may be given away to those in need or resold to individuals at a low price. In order to ensure that your household goods donations qualify for tax deductions, you must do the following:

  • First, make a list of all of the items that you are donating and include the value of each of those items.
  • Next, when you drop off the donations, be certain to get an itemized list and receipt confirming your donation from the organization, business, school, and/or charity that you have donated.
  • If you find that your donations exceed the value of $5,000.00, you will need to obtain an official appraisal.

Qualified Organizations

If you want to donate the household goods that you uncover in your spring cleaning activities, it is important that you know which types of organizations you may donate to that will allow you to enjoy the tax deductions of the donations. The following outlines these organizations:

  • Religious Organizations
  • Educational Organizations with Tax-Exempt Status
  • Hospitals
  • Medical Research Facilities
  • Governmental Units
  • Organizations Supported by the Public
  • Certain Private Foundations
  • Certain Membership-Based Organizations
  • Tax Exempt Retailers, such as Goodwill

Conclusion

When spring cleaning, do not throw your household goods and other unwanted items out. Instead, donate them to your favorite charity, or another tax-exempt organization. In doing so, you will get to enjoy a wide array of tax deductions that could result in big savings. You must simply pay attention to the places that you donate, must keep track of your donations, and must adhere to all of the rules – as outlined by the Federal Tax Law. Why throw out unwanted and/or unused items when you may donate them, assist others that have a need, and enjoy a multitude of tax deductions that will bring in extra cash?

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