Downsizing is the newest thing thanks to a few books about organizing that came out a few years ago. One of them is The Life-Changing Magic of Tidying Up by Marie Kondo, which encourages readers to get rid of items in their life that don’t bring them joy any longer. Well, there is actually a financial benefit to doing this, which can be particularly helpful to retired folks. This could be a great way to save on your taxes, especially if you are trying to downsize from a big house to a smaller condo or apartment as part of your retirement plan.
There are some things to consider, however, about the type of documentation you will need in order to get your tax deductions. If your donation has a value of less than $250 dollars you will just need a receipt from the place that you donated it to. If it is less than $5000 but more than $250 you will need a letter from the charity you donated to acknowledging that they received the items. Donated items more than $5,000 need to be evaluated by an official appraiser to receive the tax credit.
Don’t let all of this paperwork scare you into holding onto your items. It should be fairly easy to get it all done and before long you will not only be donating great things to charitable organizations who need it, but also saving dough on your taxes. Think that only clothes are a good item to donate? You’d be wrong. You can also donate furniture, technological equipment, home products and more. Anything that might be useful to someone else is a possibility to donate, so before you just throw something into the trash, think about a charity that could possibly use it!
Donate a couch to a children’s group or after school program that needs a new one for their chill out area. Donate an old computer to a program that teaches people how to use them, or give a historical or collectible item to an organization for an auction to raise funds. Either way, your trash may be someone else’s treasure that helps them out greatly!