Last-Minute Tax Filers Can Ease the Pain With Charitable Giving

Many taxpayers who owe the IRS money tend to wait until the very last minute to file their taxes.  (San Franciscans, Houstonites and New Yorkers are the three worst procrastinators, according to TurboTax.)

I can’t say I blame them, but for those of you who fall in this category, remember there’s still about five days to dig out your receipts for charitable donations, which can lower your tax bill.

The IRS says you can deduct the “fair market value” of donated clothing and household goods, based on how much your donations would sell for in today’s market.

Don’t guess at the value of your donations, because exaggerated valuations could trigger an audit.  Instead, check the “value guide” at the Salvation Army or Goodwill.  The Salvation Army site includes high and low estimated valuations based on condition, age and quality. It’s up to you to gauge condition. Most clothing, for instance, has a very low valuation; for example, a man’s raincoat can be valued for tax purposes from a low of $5 to a high of $20. A child’s blouse can be valued from a low of $2 to a high of $8, and a woman’s skirt can go for a low of $3 to a high of $8. Valuations are also provided for appliances, furniture and household goods.

Remember that you can’t take a tax deduction on anything sold through a consignment store, which typically offer donors a percentage of the final sale price.  Direct contributions to specific individuals, rather than qualified charitable organizations, are also not tax-deductible.

Tags: Personal Finances, tax deductions, taxes

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