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How You Can Lower Your Tax Bill By Donating Your Crap

Hopefully, you’ve done some spring cleaning this month. If so you’ve probably made a few bucks selling some of your old junk, but chances are you still haven’t sold everything. Rather than keeping a pile of stuff around just go ahead and donate it.

I know what you are thinking how can you take advantage of donating your stuff? Well in the alternative you could put it curbside with a “FREE” sign, or give it to someone’s kid or a friend who is just getting their first place (If they specifically ask if you have anything then ok, maybe give it to them). The selfish option is to donate your stuff it for the tax benefit.

What is the Tax Benefit for Donations?

Charitable donations qualify as a deduction on your taxes. You can generally reduce your tax bill a $0.25 for every dollar you donate. The Simple Dollar does a great job of walking you through the math in this post. So for example, in 2015 I donated $1500 worth of items to charities, saving me approximately $375 dollars in taxes.

Effort Required: Sell vs Donate Your Stuff

Now if I would have kept those items instead of donating them and taken the time to sell them I would likely have made more than $375. However, it also would have required a lot more of my time. Time, I didn’t have because I was moving out of state.

Donating took significantly less time and effort. A couple of donations involved me driving to my chosen charity and dropping off the stuff. The biggest donation was picked up by the charity themselves, all I had to do was call. It doesn’t get easier than a phone call.

How to Make Sure You Get the Deduction

First, always get the receipt from the charity showing you donated.

Second, make an itemized list of everything you donated. I like to staple the two lists together and then file them away in a folder marked for that year’s taxes. When tax time comes, I itemize (list everything you donated) the deduction, there is a cool tool that lets you look up the value of each item and totals it up for you. Voila, you’re done.

Wrapping it Up with a Bow on Top

The biggest mistake you can make when trying to get a tax deduction for your donations is to not keep a detailed list of the items you donated. The next biggest mistake would be to not donate to a legitimate charity and to forget to get the receipt for donating. Take the time to keep track of what you are donating and it will payoff come tax time.

Do you like to sell or donate your stuff? Let me know in the comments!

Hustle tools & resources i recommend

GRAMMARLY (BE A BETTER WRITER) I use Grammarly as a second pair of eyes to help me clean up and proofread my writing/typing. The best part is that it is free to use. You can install an extension on your web browser and it will check any writing you do online. While there is a paid premium version, you can get by with the free version for a long time. I only recently upgraded. If you want to know more about Grammarly, you can read my review.

30 Days or Less to Freelance Writing Success (to start freelance writing) Personally, I found the course, 30 Days or Less to Freelance Writing Success extremely helpful to get me started with freelance writing. It breaks down everything you need to do, step by step, so that by the time you get to pitching for jobs, you are prepared and successful. For me, the course paid for itself when I got my first freelance writing job. I now earn between $2,000 - $4,000 per month (check out my income reports) with freelance writing.

Lyft (to make money driving) Driving with Lyft is a great way to earn some extra cash. I love how easy it is to just turn on an app when I feel like driving and make some money. I wrote an entire post about driving for Lyft. It includes what you can expect during the application process, what it's like to actually drive and the many perks of driving with Lyft.  Get started driving for Lyft.

BookScouter (to make money selling your books) BookScouter allows you to enter your book's ISBN number and it compares the prices it would get from various sellers, making sure you fetch the most money possible for selling that book.

Contena (for Finding Freelance Writing Jobs) I used Contena when I was working my 9-5 and getting started freelance writing. It made it easy to find freelance writing jobs to pitch. While it's not a cheap Contena is definitely worth it if you don't have a ton of time to spend looking for freelance writing jobs to pitch. Contena pulls together pretty much all of the available freelance writing jobs out there into one place and will  notify you via email of ones in your niche. 

Rover (make money hanging with dogs) Rover is a website that connects pet sitters with pet owners. I did a video tutorial on how to use the site as pet sitter and the accompanying post goes over what makes Rover a great side hustle. Read and watch the post or get started petsitting.

Quickbooks Self-Employed (for managing Hustle Money) I use the QuickBooks Self Employed (BTW you'll get 50% off with my link) app to calculate my quarterly taxes so I know how much to set aside. Though keep in mind it only keeps up with federal taxes and you will need to set aside an additional amount for your state taxes. 

Liz

Liz is a blogger helping people with personal finance and working for themselves. She shares her own journey to debt freedom and helps graduates dealing with above average student loan debt on her site, Less Debt More Wine. She currently resides in NC after calling Massachusetts home for nearly a decade.

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