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In these tough times getting another $500 or $1,000 can make a huge difference. But getting extra hours at work, a raise, or finding an uncle that has spare cash just isn't in the cards this year. Well, your big Uncle, Uncle Sam, is always ready to give you a little money, so take advantage of it. Head to your closet and look at everything that that you really don't use anymore. What would you pay for each of these items if you went to a thrift store? If you don't know, head down to one and find out. If you have really nice stuff, head to a "boutique" thrift store. The IRS will allow you to take the Thrift Store value of each donated item off of your taxes. You have to itemize for this to be worth anything, but if you are in a high tax state or if you have a mortgage, you probably qualify.
Create a spreadsheet of every item, the color and the thrift store value. You'd be surprised how much this adds up to just due to the sheer number of pieces. How much is it worth to you? If you are itemizing and are in the 28% tax bracket with a 7% state income tax, you would get 35% of the thrift store value. The higher your income, the more you are able to deduct since it is all based on your marginal tax rates. So if something is worth $5, it's worth $1.75 in real cash to you. If you have 300 pieces like this, you just got yourself over $500 for your donation to charity.
Important Notes:
1) Always get a receipt from the charity that details what you have donated ("3 bags of women's clothing")
2) Keep the receipt and your detailed spreadsheet together in a file for your taxes
3) Be realistic on the values. That sweater may be precious to you but it isn't going to fetch $50 at a thrift store.
Take some time this Thanksgiving to collect and itemize all your charitable donations and help a family that is less fortunate than yours and help yourself at the same time.
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