Filed under Money and Finances on December 18th, 2008:
Helping Others, Saving Money…Who Knew Taxes Could Be This Fun
Do you want to know a simple way to help others while saving up to 50% of your adjusted gross income this tax season?
Give
It’s that simple. Giving your resources can do more than just help out those in need in the Bakersfield area and beyond. Tax-deductible donations can save you bundles this tax season.
Step inside your garage or storage area. How much stuff do you have in there that hasn’t been touched for months, if not years? Look around your apartment home. Tax-deductible items are everywhere. Time for a new sofa, end table, or dining chairs? Take a peek inside your closet. Could you use a new winter jacket or suit? If you’re like most people, your apartment is full of stuff that is in great condition but you just don’t A) use it any more or B) like the style.
Well, don’t hang on to it…give it away!
Give to Who?
There are 5 types of organizations you can make tax-deductible donations to:
1) Any non-profit organization that operates in one or more of the following areas:
- Religious: ex. churches, temples, synagogues, mosques
- Charitable: ex. Red Cross, United Way, the Salvation Army, Kiva
- Educational: ex. Boy Scouts, Girl Scouts, colleges, museums
- Scientific: ex. Bill and Melinda Gates Foundation, NCSR
- Literary: ex. Rock for Reading
- The prevention of cruelty to children or animals: ex. PETA, CASI
2) War Vet Organizations: ex. Veterans of America
3) Nonprofit cemetery companies
4) Fraternities ex. Freemasons, Phi Alpha Gamma
5) The Federal or State government- ex. gifts to local firefighters or police
Give What?
Tax-Deductible Donations generally fall under 2 categories: Cash and Non-Cash. Cash donations are fairly self-explanatory. If, for instance, you give $100 to the Bakersfield Boys and Girls Club, you can deduct the full amount given. Non-cash donations can be almost anything that has consumer value. Your car, television and fancy slippers are all potential non-cash donations. As long as the items that you plan to donate are in good condition you can deduct their fair market value when you itemize your taxes.
What Denotes ‘Good’ Condition?
An item is in good condition if it:
- looks new or has only slight wear
- is a mid-level to high-level brand
- would be used by the typical consumer
An item is NOT in good condition if it:
- shows obvious signs of wear (even if it’s still functional)
- is a low-level or generic brand
- would not be used by the typical consumers
What’s Fair Market Value?
According to the IRS, the fair market value is the price that a consumer would expect to pay for an item if bought on the streets. This is not necessarily the price you paid for it. Depending on what you’re donating, this will be more or less than the purchase price. A ’68 Les Paul guitar would be worth far more now than it did when you bough it in 1968. A 2001 Dell computer would probably not. One easy way to find an item’s fair market price is to see how much it’s selling for on sites like eBay or Craigslist.
One Last Thing…
After you have scoured your Bakersfield apartment for items that people might want and are in good condition, donate them to a non-profit organization. Many non-profits in the Bakersfield area will even come pick up your items for free. If your donation is worth more than $250, make sure to get a receipt. It serves as proof of your tax-deductible donation and will help you when it comes time to itemize your taxes.
Donating your resources is not only good for those who are in need; it’s good for your tax refund too.
Who knew taxes could be this fun?
February 4th, 2010 at 5:03 am
Hello. Fantastic job. Thanks!