Daycare.com Forum
Daycare and Taxes>what are the guidelines for clothing deductions??????
TSDaycare 09:10 AM 02-23-2011
Sorry I know this is not a daycare question but as a provider I find this site extremely helpful and I figured you all would share the knowledge you have.......
I have always just given the clothes to goodwill without keeping track or getting a receipt, but as I look at the value I can get for perfectly good clothes my kids have grown out of, I would like to start keeping track this year. I am far from a pack rack, so every season what we haven't worn gets put in a box, and my childrens clothes are in fantastic condition, just don't fit anymore, can anyone tell me whether you HAVE to have a receipt when claiming these? Or does a list you keep of everything you give away suffice? If a receipt is not needed, I would like to claim all the clothes I got rid of last year, although I didn't keep track perfectly.....I have started an excel spreadsheet for this yr to keep track, but I never realized how fast it adds up!!! Last question- is there an maximum amount you are allowed to claim? I know some people go extremely overboard with this because they can, there isn't a way for the IRS to argue this as long as it is on paper right? But I still prefer to do it honestly! I'm looking at right around $800 last yr for myself, DH, and 1 child....does this sound reasonable???
Thank you everyone.....
I have always just given the clothes to goodwill without keeping track or getting a receipt, but as I look at the value I can get for perfectly good clothes my kids have grown out of, I would like to start keeping track this year. I am far from a pack rack, so every season what we haven't worn gets put in a box, and my childrens clothes are in fantastic condition, just don't fit anymore, can anyone tell me whether you HAVE to have a receipt when claiming these? Or does a list you keep of everything you give away suffice? If a receipt is not needed, I would like to claim all the clothes I got rid of last year, although I didn't keep track perfectly.....I have started an excel spreadsheet for this yr to keep track, but I never realized how fast it adds up!!! Last question- is there an maximum amount you are allowed to claim? I know some people go extremely overboard with this because they can, there isn't a way for the IRS to argue this as long as it is on paper right? But I still prefer to do it honestly! I'm looking at right around $800 last yr for myself, DH, and 1 child....does this sound reasonable???
Thank you everyone.....
TomCopeland 10:58 AM 02-23-2011
You are right to think about the tax deductions of clothing contributions. They can certainly add up.
I use ItsDeductible a software program that is part of Turbo Tax. It gives you a detailed breakdown of the value of used clothing (and lots of other stuff). The values are based on thrift store prices around the country, so you can feel safe using them on your tax return. My wife and I have done this for many years and we usually end up with hundreds of dollars of stuff each year.
You won't need receipts for this. I recommend taking pictures of the clothing (laid out on the floor) before you bag them up. Create a list of the stuff as well.
You will fill out IRS Form 8283 Noncash Charitable Contributions. If you have more than $500 worth of stuff you will need to list some additional information.
Note: If you are donating clothing used by your day care children and deducted on your business taxes, you can't also claim a charitable deduction for the same item!
Next Monday join me for my webinar "How to Reduce Your Taxes for 2010 and 2011 sponsored by daycare.com. For more info:
https://www.daycare.com/news/taxes/t...d-webinar.html
I use ItsDeductible a software program that is part of Turbo Tax. It gives you a detailed breakdown of the value of used clothing (and lots of other stuff). The values are based on thrift store prices around the country, so you can feel safe using them on your tax return. My wife and I have done this for many years and we usually end up with hundreds of dollars of stuff each year.
You won't need receipts for this. I recommend taking pictures of the clothing (laid out on the floor) before you bag them up. Create a list of the stuff as well.
You will fill out IRS Form 8283 Noncash Charitable Contributions. If you have more than $500 worth of stuff you will need to list some additional information.
Note: If you are donating clothing used by your day care children and deducted on your business taxes, you can't also claim a charitable deduction for the same item!
Next Monday join me for my webinar "How to Reduce Your Taxes for 2010 and 2011 sponsored by daycare.com. For more info:
https://www.daycare.com/news/taxes/t...d-webinar.html
legomom922 03:24 PM 02-23-2011
Here is another idea, but it doesnt involve taxes, LOL. I used to claim the clothes I gave away, but found even a better way! Like you, our clothes are in the best shape. So now I take them to a consignment shop and I get a ck every 3 months! It's alot more than what I could get by deducting the clothes! I have 3 big bags ready to drop off there next week too!
Which reminds me, do I have to claim the money I get from the
sale of these clothes Tom?
Which reminds me, do I have to claim the money I get from the
sale of these clothes Tom?
TomCopeland 05:55 PM 02-23-2011
If you are selling the clothes at a profit, you would have to report the income. But, since, I assume, you are selling them at a loss (for less than you paid for them) you don't have a profit and therefore no income to report. Consign away!
Join me this coming Monday for my webinar "How to Reduce Your Taxes for 2010 and 2011" sponsored by daycare.com. For more info: https://www.daycare.com/news/taxes/t...d-webinar.html
Join me this coming Monday for my webinar "How to Reduce Your Taxes for 2010 and 2011" sponsored by daycare.com. For more info: https://www.daycare.com/news/taxes/t...d-webinar.html