Your old car can get you back some good earned tax dollars
By Pete Maughan • PeteMaughan.com
Feel like you need to simplify? Ditch some of your old stuff that is clunking up your house and especially your garage and you could have a real winner!
And you get a triple whammy here, by emptying out your garage, your closets, your back yard, your driveway, etc, you get a bunch of savings and uncluttered living space! Nice.
Maybe you wanna ditch some old sweaters, maybe it’s an old sewing machine, maybe some pants or some old office chairs, shirts, or unused bicycles from when your kids were younger or when they lived at home at all. By doing this, you can use the same simple system to score some savings on your tax bill.
“A lot of people bring a big bag of old things and just drop em off at the salvation army, goodwill, or their local church’s donation center.”
Your paperwork, please, though!! These people who just drop off their stuff without a second thought really miss out on an important ingredient to your taxes according to Maughan, “Tax paperwork is paramount to clarifying the amount you claim on your tax writeoffs come tax time. Don’t hope for a large dollar amount for your deduction unless you track the actual items along with the proper documented receipts — think more than less. The more paperwork and receipt documentation that you hold onto, the greater the amount of deduction the IRS will validly let you claim.”
Good documentation arms yourself to ward off money-snatching government IRS agents. And documenting may not be an easy thing to remember to do, but it’s certainly important.
The Internal Revenue Service states that citizens may deduct fair market value for clothes and also for their household things. FMV typically is defined as follows: price for property that it would fetch if someone bought it, with both the buyer and seller having a reasonable understanding and knowledge of the market and the facts about the goods that are being sold.
But the Internal Revenue Service simply doesn’t have some exact mathematical formula for establishing FMV’s, so the amount that you write down does tend to be somewhat of a subjective matter. What the IRS does do, thought, is provide vague and grey guidelines.
One former agent of the IRS spoke freely in anonymous, “a shirt is a shirt. No matter whether it was purchased for $2,000 from Coach or for $10 from Walmart.” Most donated clothing goes to homeless people who really don’t give a rip about what the tag on the shirt says.
One last thing. Don’t forget that you can really up the ante in your tax writeoff section if you donate old vehicles like cars and trucks and boats. Don’t forget these. And to find more information about these, just click on the links at the top and sidebar to find more articles and great partner organizations of ours where you can donate and do some good and save some tax dough.
More From Car Donations
- How Much Can I Deduct for Donating a Car
- Finding Charities to Donate a Car for a Tax Deduction
- What’s my Car Worth if I Donate it to Charity?
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