Would You Clean Out Your Closets for $400?

Are your storage areas overflowing? Do your children outgrow their clothes at the speed of light? Have you “outgrown” (or just grown tired of) some of your clothes and household items? Wouldn’t it be nice to receive some cash for those unwanted but perfectly usable items that overwhelm your storage space?

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It’s a typical scene. You’ve cleaned out a closet or your garage and have a box full of items you no longer want. Maybe they’re left over from a garage sale. You’d rather give it to charity than send it to a landfill or maybe you just don’t want to have a garage sale.

You know you can deduct the value of the items on your tax return. (By the way your return for 2015 is due April 18, 2016 with thanks to Wash., D.C. for the gift of a 3-day extension. Washington will celebrate Emancipation Day on April 15 and the IRS will be closed. The next business day is Monday, April 18, 2016.) But the question is how are you we supposed to know the values of items in good condition that we donate to qualified charities?

The problem: If we overstate the values we risk an IRS audit, penalties and interest. If we underestimate, we could end up paying more taxes than required.

For many years the hubs and I have relied on William Lewis, CPA, who compiles one of the most valuable resources I know of for ordinary folks like us. “Money for Your Used Clothing” is an amazing resource that lists  more than 1,300 values for commonly donated household and clothing items based on current prices of these items on the secondary market. 

How does he come up with this list? I can promise you he does not rely on haphazard lists anyone can find online that supposedly offer said market values. I don’t either because I know they have not been vetted against what used items are actually selling for in thrift stores right now, today in the year 2015. And I don’t trust that those values have been vetted against what the IRS will allow, either. That’s what sets this resource apart.

money for used clothing_200Bill Lewis and his team (I know these people and they take this matter very seriously) travel from store to store, city to city, state to state to audit the actual price tags in thrift stores for everything from used shirts, pants, dresses, sweaters, blouses, socks, shoes, plates, sheets, towels, computers, vases, beds, dressers, lamps, chairs, sofas—just about everything you can imagine. Then they use the average prices to create this exhaustive list and make it available to us including clear instructions on how to present these tax deductions so the IRS is satisfied. You won’t believe what a thorough and complete resource this is.
Money for Your Used Clothing is also a workbook—one that you fill in with your specific information (the instructions are very easy to follow) then keep with your tax records.

If you are ever audited due to the values you claim on your return for Tax Year 2015, you’re in good shape because with this resource comes  an Audit Protection Guarantee. Bill and his team will step in as your Power of Attorney to defend your deductions. And if the IRS prevails, Bill will pay any penalties and fees involved. How can they take on that risk? Because the information they provide is rock solid. It is reliable and I can tell you that from personal experience.

When Bill Lewis says you will increase your tax refund (or reduce your tax liability if you owe) by at least $250, he’s not kidding. In the past 20 years that I have been recommending this resource, our Everyday Cheapskate and Debt-Proof Living members have collectively save hundreds of thousands of dollars in over payment of taxes.

If you donate items that are in good or better condition to a non-profit organization with tax-exempt status that gives a receipt for donations, you really need to capture the highest and best valuation for those donations. It’s legal, ethical and smart, too.

One more thing: You must use the 2015 Tax Year version of Money for Your Used Clothing for your 2015 return. You dare not try to use an earlier year’s valuations because that will void your Audit Protection Guarantee. Values change radically from one year to the next.

By some miracle, we are able again this year to offer this booklet for $20 plus shipping, even though it retails for much more. Click HERE to order online or call Josh at 800-550-3502, 8:30am to 5:00pm, Mon-Fri, Mountain Time to order by phone.

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3 replies
  1. Gehugh says:

    I know what Ted speaks of. If you know ANYTHING about taxes, you’ll know that that there is the standard deduction and the itemized deduction. So often there comes the instance when you cannot itemize enough to make it ‘count’. It can be frustrating knowing that wonderful monetary donation you made to public radio, the pet shelter, or your favorite chatity cannot be deducted or the fair market value of all those clothing and household items you donated when you purged, because they don’t add up for you to qualify for the itemized deduction. Review tax law for donations (available in the IRS Publication 17) because there are limits to donations. Beware of scams, too. Some ‘authorities’ say they will stand behind you or their methods will stand up in court. The only person who can legally offer that promise is your tax preparer or your CPA. Just sayin’.

    Reply
  2. Ted says:

    We are very near retirement age, we aren’t rich, but we should be able to get through on what we’ve saved. Because of deductions available to older people, at certain income levels, one can save a lot and pay no taxes if their personal debt from all sources is low.

    However, that results in not itemizing deductions, so everything we would donate to Goodwill provides zero return for us, a big disincentive when a garage sale would provide an infinitely higher return, albeit at much greater nuisance. I’d much prefer to donate the items, but not when doing so costs us food on the table.

    Reply
  3. Honeywest says:

    I have lost weight..yay! I have donated a ton of clothes this year. How will the IRS believe that I have truly donated this huge amount? Should I have taken pictures?

    Reply

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