Your Last Chance for Tax Write Off Donations in 2010

by Kevin on December 29, 2010

There’s only three more days left in the grand year of 2010. For those of you with junk to get rid of and tax write offs to capture, that’s how many days left you have to make a donation.

If you hadn’t picked up with some of the posts I wrote a few weeks ago on selling and staging a home, here’s a newsflash: my wife and I are moving.

Yikes.

I generally like to keep specifics like that off of the blog for security and privacy reasons, but by the time you read this we’ll be on our way to our new location so I’m not too concerned.

Regardless we’re moving and leaving the house behind… for sale sign in the yard and potentially looking at renting it as a last resort. (I’m sure that will result in many frustrated posts from me.)

As part of our moving process we’re taking lots of stuff to local non-profit organizations. By donating we’re lessening how much stuff we have to fit into a truck, and we get a handy tax deduction. It’s a win-win in my opinion.

How Much Can I Donate?

Technically you can donate as much money and items to organizations as you want.┬áBut you shouldn’t do that.

While I agree that giving should be from the heart I also believe it should be from the budget. Giving should be a planned event rather than something that surprises your budget on a monthly basis. (This is not to say that you can’t budget to set aside money for spontaneous giving. You can.)

In the Internal Revenue Service’s eyes you can give $500 worth of donations (either in cash, in items, or a combination of both) without batting an eye. You’ll still want supporting documentation in case you are audited.

After $500 you absolutely need to have documentation.

Also remember that the value you place on an item is not the same value the IRS places on the same item. You can count the fair market value — what you could sell it for — toward your deduction. It doesn’t matter if you spent $1,000 for a new laptop in January. If it is now only worth $350 you can only deduct $350.

Take New Year Holiday Into Consideration When Donating

One thing to consider as we wrap the year up is if you’re planning on taking a truck load of stuff to a donation center is it might be closed on the 31st. This might not a problem in most years, but this year New Years Day falls on Saturday. Most companies and organizations take the Friday before a Saturday holiday off.

There’s nothing worse than getting motivated, cleaning out the house, packing up the vehicle with donations, and driving down to donate…

…only to discover the donation center is closed that day. Avoid that fate by calling ahead or just getting your donations down the day before.

You’ll want to get those donations in this year. There’s nothing like claiming a deduction on a donation made the first week of January. You don’t get to enjoy the tax benefit for another 12 to 16 months (depending on when you file your taxes). Ouch!

{ 2 comments }

Lisa Falcon December 30, 2010 at 10:07 am

Thanks for the tips!! I use itsdeductible… it seems to work out great for us… I have already started on our taxes… any other tips???

Golfing Girl December 30, 2010 at 10:16 am

A little off topic, but I strongly urge you to keep some furniture at your house (the one that’s for sale) and rent a furnished apartment at your new location (particularly since you don’t have kids this will be easy). Unfurnished/empty homes are VERY hard to sell. Even if you leave just some basics in every room, the buyer can imagine the home furnished much easier. People have no imaginiation and will walk in and wonder if their furniture will be able to fit (houses actually look smaller without furniture).
This was the biggest mistake we ever made and I just wanted a chance to save someone else from making it. Plus it would have given us more time to find a place if we weren’t worried about storing all our extra stuff while we looked.

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