This time of year can mean an influx of stuff and an outflow of dough. One way to counter this is to go through your closet and get rid of all your unwanted clothes. Every year I have a few shirts, sweaters, coats, and other things that I just don’t need anymore. Between my wife and I, this year we had six bags of clothes to donate.
How can you Give, Save, and Simplify your life? Follow these simple steps:
1. Clean Your Closet – Go through your clothes and get rid of the obvious things that you no longer wear. Then go over the things you are keeping for sentimental reasons and ask yourself, would someone else benefit more from this than me?
2. Catalog your items. I use an Excel spread sheet I created a couple years ago. This sheet catalogs your clothes and household items, and assigns them an estimated value based on tax valuations at bankrate.com. You can download your own FREE copy of this excel sheet here.
3. Take a Picture – I usually stack the items together and take a picture for reference. This is followed by good notes at the bottom of the excel sheet.
4. Give – Give the items to your preferred charity. While I choose Volunteers of America because of how they indirectly helped a friend of mine, my neighbor finds it more convenient to donate to Good Will. You may prefer The Salvation Army. The important part is to find the charity that fits you, and start this new habit.
5. Take Documents to Your Accountant – Give the donations receipt, excel worksheet, and pictures to your accountant for your tax records. For non-cash donations greater than $500, you may need to fill out form 8283 along with your Schedule A. You can download that form from the IRS website at http://www.irs.gov/pub/irs-pdf/f8283.pdf.
It should be noted that in order to get the deduction, you need to itemize your taxes. But even if you don’t’ itemize and get the deductions, it still feels good to Give, and Simplify.
For more on donating items, visit the IRS website Publication 526.