Ah, the glories of spring: twittering birds, blue skies, returning winter coats to storage and the start of spring-cleaning. This year, before you simply throw away your unwanted stuff, why not pay yourself back, compliments of Uncle Sam?
Do you usually just give your things to the nearest Goodwill and politely refuse a receipt, thinking your donation isn’t worth much? Well, think again. The book “Money For Your Used Clothing, 2009 Tax Year” — part donations valuations, part workbook — lists IRS-accepted values for more than 850 household items that commonly are donated to charities, such as Goodwill and The Salvation Army, for resale. This handy booklet offers eye-popping proof that your discarded items can be worth a lot at tax time.
Most of us who itemize our federal and state income tax returns lowball the estimated value of our goods for fear that the IRS will swoop down to clobber us: “You claimed $10 for this never-worn Christian Dior dress? Are you crazy? That will be a $10,000 fine and 10 years in Sing Sing.”
The author of the book, certified public accountant William Lewis, gives this example: Let’s say the total market value of your donated items is $1,500. Multiply that by your tax rate, say 28 percent, to determine your tax savings. Are you ready? $420!
“Money For Your Used Clothing” offers excellent advice on determining the certified market valuations accepted by the IRS on hundreds of items taking up space in your home. The author helps you determine the condition of your stuff. Then a dollar amount is assigned that you can legally deduct from your total income.
Last year’s leather pumps look great, but you don’t wear them anymore. Donate them for a $16 tax deduction. How about those nice jeans you can’t squeeze into anymore? A $9 deduction. Not having any more babies? A maternity dress in good condition can be deducted for $18, and the IRS won’t even blink. Check your clos-ets. Computers, rainwear, toys, books, major appliances, linens, athletic equipment, furniture, magazines and even underwear (remember Hillary Clinton?) all can be deducted at prices you probably never dreamed of.
Once you’ve set aside your items to donate, simply record them in the handy ledger provided in this book. Add up the total and enter it in the appropriate space on your 1040 form. Then sleep with a smile on your face. The author includes practical advice on how to claim these deductions. He recommends you photograph your stuff before you box it up. Always get a receipt from the charity. The IRS doesn’t like photocopied receipts, so stash those originals in a safe place.
“Money For Your Used Clothing” is available in the Debt-Proof Living bookstore (www.DebtProofLiving.com) or by calling 800-550-3502, Monday through Friday, 8:30 a.m.-5 p.m. Pacific time. The 2009 edition corresponds with the federal tax return you must file on or before April 15.
“Money For Your Used Clothing” comes with a $200 savings guarantee. If, after completing this booklet’s workbook, you don’t save an additional $200 on your itemized tax return, then return it for a full refund.
Mary Hunt is the founder of www.DebtProofLiving.com and author of 18 books, including her latest, “Can I Pay My Credit Card Bill With a Credit Card?” You can e-mail her at firstname.lastname@example.org, or write to Everyday Cheapskate, P.O. Box 2135, Paramount, CA 90723.