November 11, 2007,
J.E. asks from McKinney, TX on November 09, 2007
More Beneficial to Donate or Sell?
I have a garage full of things that we'd planned to sell in a garage sale. However, I am donating a kitchen table to Good Will on Monday and, since their truck will be here, I'm considering donating all the items (everything from knick knacks to furniture to clothes in great condition).
I'm wondering if the tax write-off I'd get is better than what I could get in cash in a garage sale. I'm thinking it is, but I don't know if, for example, $500 made in a garage sale is the same as getting a $500 deduction on taxes. If so, I'd rather donate the items and not mess with the garage sale. If, however, cash goes further, I'm willing to do a garage sale.
Thanks SO much, Mamas!
T.F. answers from Dallas on November 09, 2007
I hate garage sales. People always want something for nothing and I get inslulted to put GOOD quality items out for nearly nothing anyway just to have someone try to get it much cheaper. (EX...I had my 12 yr olds gently worn Abercrombie clothes out for sale and I was offered $2 for a $50 pair of jeans, etc.) I thought I was generous to ask $10 and under for the items.
My hubby is a numbers man (MBA from Duke) and this is calculated carefully. When you take into consideration of the money made at the garage sale vs tax benefit....keep in mind YOUR time spent at the garage sale. YOUR time is worth a lot as well.
I am very detail oriented. For tax purposes, I take pictures of items I have donated in case IRS wants to see something. We donate to the women's shelter in Plano mostly (washer/dryer, computers, tv's, furniture) and clothing items go to Goodwill. I keep all the donation receipts in my tax file.
1 mom found this helpful
M.A. answers from Dallas on November 10, 2007
You cannot deduct the full amount that you donate...depending on whatever tax bracket you fall in, you can donate a certain PERCENTAGE of what you donate. So if you donate $1,000 in items, you will not be able to deduct $1,000. You have to look up your percentage and deduct maybe 10% or 20%, etc....depending on your tax bracket. So you will be better off to sell them in a garage sale.
R.H. answers from Dallas on November 11, 2007
I just did my first garage sale and it was a lot more work than I thought or ever imagined it would be! We made about $180.00. I worked an entire week getting all of our junk down from the attic. Then my mother-in-law came and helped me get it all organized one day and my kids went to their little day school, and then we had the sale on Saturday from 7:30-2. Oh, and I had to make signs and put them out. Then after the sale all the stuff we didn't sell, we had to take to Goodwill. It's A LOT of work and if I were you, I would just take it to Goodwill and get the tax deduction. If you really need the money, then you'll definitely make alittle, but it wasn't really worth it for us. Hope that helps. :)
A. answers from Dallas on November 11, 2007
The technical answer is it depends on your tax bracket. You don't pay taxes on dollars donated. For estimating, you could say that you will save about $.25 for every dollar of goods donated. (This assumes a 25% tax bracket.) It doesn't sound like much but I would guess that people over estimate the value of goods donated. For example, the other mom was sure she could get $10 for a pair of jeans (she would save about $2.50 in taxes). In reality, she said people would only pay $2. For her, it would be better to donate.
Forgetting the technical aspects, I have done a garage sale, sold stuff at consignment sales, sold stuff to resale shops, sold stuff on Craig's list, and donated. For small items, I think donating is the way to go. It is easy and fast and the savings do add up. For anything over $25 or physically bulky for me to haul, I have had really good luck with Craig's list (www.craigslist.com).
A.J. answers from Dallas on November 11, 2007
I think its better to have the cash because a 500 tax deduction does not equal 500 cash it only deducts that off of your income... if you have the space to store it have a sale use the money for new stuff or clothing or donate the cash to a family for Christmas but I think its better to have the cash. plus, a lot of those places you never know what really ends up in the store and if you donated the cash to a family you know that 100% of that cash is going to that family... or 100.00 to 5 familys...you get the idea.
Just some thoughts...