Happy First Day of Spring 2008!
Those bluebonnets there to the right have sprung up in our front yard, valiantly fighting their way through the dandelions that also have had impressive growth spurts following recent spring rains here in Austin.
Although my gardening hubby would vehemently disagree, I don't really begrudge the dandelions their day, too. You know what they say: A wildflower is just a weed with a good PR agent.
This traditional season of renewal is naturally associated with clearing out and reorganizing your life. But this year, instead of simply throwing away clothes and household goods you no longer find useful, consider giving them to your favorite charity.
Charitable giving tax rules: Just ensure you follow IRS rules. The first is to make sure the items are in good or better shape.
In that same vein, appropriately assess the value of your donations. No, that ratty, hole-ridden pair of socks is worth nothing, not $5. It's that kind of over-pricing that prompted the new gift deductibility rules.
IRS Publication 561, Determining the Value of Donated Property, provides general guidance on assessing a gift's deductible value. There also are several software programs that can help you figure this out. And you might want to check out eBay to see what the going price is for an item you're giving to your local Goodwill or Salvation Army branch. You probably won't find those socks, but you might be surprised what people are trying to sell online!
If you gave away goods by last Dec. 31, don't forget to account for them on Schedule A when you file your return this year.
As for the donations you're making today or any time this year, those will be deductible on your 2008 return. So hang onto those receipts and acknowledgment statements until next filing season.
You can read more about the tax implications and benefits of charitable giving in these earlier blog posts:
- A Closer Look at Charitable Giving
- Charitable Tax Planning
- Donation Deduction Don'ts
- Are Charitable Tax Deductions Worth It?
- Year-end Money Moves Part 4: Giving
So enjoy these mild spring days, and make the most of the tax saving potential of your spring cleaning.