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Question on donation of bags of clothes

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  • Larry Ragman
    replied
    Originally posted by jfoxcpacfp View Post
    Speaking of audits, if you can show you made an attempt to keep track of your donations and assigned a reasonable value on a consistent and contemporaneous basis, the IRS is highly unlikely to quibble over the values assigned unless it appears you are trying to cheat. Audits are not all black and white.

    Again, when you are moving, those goods donated can add up to a significant amount, possibly even surpassing your Turo income.
    In any given year we have $500 or so in noncash donations. Not going to make any real difference but hey $200 or so for just noting what is put in the bag seems a reasonable return on effort. And agreed, after major clean outs it can be quite a bit more.

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  • jfoxcpacfp
    replied
    Speaking of audits, if you can show you made an attempt to keep track of your donations and assigned a reasonable value on a consistent and contemporaneous basis, the IRS is highly unlikely to quibble over the values assigned unless it appears you are trying to cheat. Audits are not all black and white.

    Again, when you are moving, those goods donated can add up to a significant amount, possibly even surpassing your Turo income.

    Leave a comment:


  • The White Coat Investor
    replied
    I've used it's deductible in the past. Works well. Certainly defendable in an audit.

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  • Hank
    replied
    Originally posted by MPMD View Post
    yeah i think that's the biggest thing -- not to overvalue things.

    your old dress shirt is worth about a dollar no matter how snazzy you think it is.
    But it's velour. It's very snazzy!

    Do you know how many naugas had to die to make this full length coat?

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  • jfoxcpacfp
    replied
    TT has It’s Deductible, which we’ve used for years. Pretty nice program if you’ve got a lot to give away. When you’re moving and cleaning out, it often (for most clients) adds up to several thousand dollars. I believe you use the same login as you do for TT, at least, I just checked my QBO login and it worked.

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  • billy
    replied
    this year im actually using an excel spreadsheet because I will be donating all my wifes stuff. Other years never bothered, jsut a random "100" or whatever my accountant figured would be reasonable. Havent itemized in a few years though

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  • jz-
    replied
    Expanded tax benefits help individuals and businesses give to charity during 2021; deductions up to $600 available for cash donations by non-itemizers | Internal Revenue Service (irs.gov)

    The $300/$600 deduction expired in 2021.

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  • Tim
    replied
    And don't forget the $300 for cash donations even if you don't itemize.

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  • jz-
    replied
    Remember that your SALT + charitables + mortgage interest > your standard deductions.

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  • Larry Ragman
    replied
    Originally posted by Tim View Post
    Old school:
    Wife writes a notepad inventory of what is being donated. 25 dress shirts, 10 shorts , 1 toaster etc.
    Now, I try to be fair. I don’t want to use $10 an item on everything. $2, $5, or $10? Each is different.
    50+50+10= 110 Bingo! I might even write a price on each line. My theory is if the IRS has a bone to pick, that receipt and note pad are my proof.
    That was a mighty fine toaster! If a $10 toaster is the only question, battle of deductions is won! Victory is mine!
    More or less our method too. My wife does the donations and jots down basic categories and number of each (e.g., men’s slacks, ladies blouse). We keep that list attached to the receipt. I run it all through the tool I linked above because it does the valuations, but that can be done in TT or other places too.

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  • Tim
    replied
    Old school:
    Wife writes a notepad inventory of what is being donated. 25 dress shirts, 10 shorts , 1 toaster etc.
    Now, I try to be fair. I don’t want to use $10 an item on everything. $2, $5, or $10? Each is different.
    50+50+10= 110 Bingo! I might even write a price on each line. My theory is if the IRS has a bone to pick, that receipt and note pad are my proof.
    That was a mighty fine toaster! If a $10 toaster is the only question, battle of deductions is won! Victory is mine!

    Leave a comment:


  • MPMD
    replied
    Originally posted by Larry Ragman View Post
    If the total of in noncash valuations is <$500 you don’t need to file a form 8283 to breakout the valuations, but as a practical matter you do still need to figure it out. The $/bag method is OK I guess as long as you are under the threshold. But none of this is hard. Salvation Army, TurboTax and many others have a valuation guide. Just count up the categories. 12 pair of men’s slacks at $2.50 a pop, or whatever.

    Here is an easy way to do it. Go to this website. It allows you to enter items and update the number of each. Uses Salvation Army valuations, I think. Prints out an 8283 for you. https://www.8283ez.com
    yeah i think that's the biggest thing -- not to overvalue things.

    your old dress shirt is worth about a dollar no matter how snazzy you think it is.

    honestly for someone making doctor money trying to itemize donations of clothing is probably not even worth the time IMHO. an absolute winnowing of your closet is probably worth $100.

    Leave a comment:


  • Larry Ragman
    replied
    If the total of in noncash valuations is <$500 you don’t need to file a form 8283 to breakout the valuations, but as a practical matter you do still need to figure it out. The $/bag method is OK I guess as long as you are under the threshold. But none of this is hard. Salvation Army, TurboTax and many others have a valuation guide. Just count up the categories. 12 pair of men’s slacks at $2.50 a pop, or whatever.

    Here is an easy way to do it. Go to this website. It allows you to enter items and update the number of each. Uses Salvation Army valuations, I think. Prints out an 8283 for you. https://www.8283ez.com

    Leave a comment:


  • CordMcNally
    replied
    I don’t even mess with them. I find it easier rather than placing arbitrary numbers on small things we donate throughout the year.

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  • VentAlarm
    replied
    Yea. I used to catalog what I donated, then I was like “you know what, if the IRS wants to call me on a couple hundred bucks that I have a receipt for, let me come.”

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