If you itemize your tax return, you are in a perfect position to pick up some extra dough.
You do know that you are allowed to deduct the fair market value of items you donate to qualified charitable organizations, right? And you probably don’t do a very good job of that, because how on earth are you supposed to know the fair market value of those shoes or that bag of clothes? Or that computer, that lamp or the books you no longer need?
Most people stuff a bunch of clothes into bags, drop them off at a collection center and claim a $100 deduction. But those clothes easily could have been worth $1,500 or more, if only they had known how to value them. The values add up quickly.
Books and even magazines can be donated to libraries or churches and properly valued. The law does not allow a charity to set the value of an item. You, the donor and taxpayer, must do that. But how much should you claim?
If you overstate the value, you risk an audit, penalties and interest. If you underestimate, you will pay more taxes than you should.
Here are some examples of what donated items are worth, assuming they’re in “good” condition:
??? –Dress: $13.
??? –Man’s suit: $35.
??? –Boy’s jeans: $8.
??? –Girl’s sneakers: $12.
??? –Luggage set: $10.
??? –Stuffed animal: $3.
See what I mean? And it can really add up fast.
In his booklet “Money For Your Used Clothing: Valuable Tax Deductions for the 2010 Tax Year,” certified public accountant William R. Lewis comes to the rescue of uncertain taxpayers. The booklet lists values for more than 700 items of clothing and household goods commonly donated to charity. The values are obtained from annual surveys of consignment and thrift shops that Lewis and his staff perform in all areas of the U.S., conforming to Internal Revenue Service requirements for donated items. Lewis produces a new and updated version of this book every single year to reflect true values for the current tax year.
“Money For Your Used Clothing” is guaranteed in two ways:
??? 1) If you itemize your tax return, Lewis guarantees you will reduce the tax you owe or increase your tax refund by at least $250 or your money back.
??? 2) If the IRS disallows the deduction, Lewis personally will pay any interest and penalties. By using “Money For Your Used Clothing,” Lewis estimates that clients (thousands of them are in our own Debt-Proof Living family) have saved more than $15 million in taxes, which otherwise would have lined the pockets of Uncle Sam. That’s a pile of allowable deductions.
“Money For Your Used Clothing” addresses recent tax law changes and guidelines for tax year 2010 (the tax return you must file by April 15, 2011). It retails for $25. Because I believe this is such a valuable tool, I’ve negotiated a special price of just $20 plus shipping and handling for my “Everyday Cheapskate” readers.
Go to http://www.DebtProofLiving.com, and click on “Bookstore” and then “Other Books.” Or call 800-550-3502 Monday through Friday from 9 a.m.-5 p.m. Pacific time.