November 16th, 2015

TAX TIP OF THE DAY... 
Clothing donations can increase your refund up to $25 per bag!  This only works if you already deduct schedule A deductions (mortgage interest, property taxes).  These are the rules and how you do it... 
1) DROP BOXES usually won't work. 
2) get a RECEIPT-- it only takes 3 seconds at Salvation Army on Trindle Road.  The receipt is usually blank so you need to complete the # of bags, your name & address and value that your want to deduct (see below). 
3) DETAILED LISTING OR NOT?  I've never had an IRS auditor ask for the listing of what was in each bag, but it could happen.  My practical advice is to skip the listing unless you have lots of time on your hands.  Instead take a pic with your phone.  
4)HOW DO YOU VALUE THE CLOTHING...  you do this at home either before or after you drop off.  So don't be intimidated by the thrift store employee!  Often, there is a list on the back of the receipt with values.  There are software and web sites.  But REAL WORLD... $100 per large Hefty bag has been used by many taxpayers without issue even though not an IRS approved method.  If you are reasonable, any approach most likely will be allowed as long as you have a receipt.  If you have more expensive clothing such as formal wear or coats, then value these separately at higher amounts.  Use the price you could sell these items for on ebay (not yard sale prices, which are less).  

A professional tax advisor can help advise if your deductions are approaching audit trigger parameters.  SHARE WITH A FRIEND.