Begin your new year by accomplishing two good deeds: cleaning out the closet and landing a tax deduction. Leanne Sommers at Goodwill Industries says when you make a donation at your local Goodwill, you should make a list of what you gave. While you can deduct charitable giving on your income taxes, you have to estimate what the stuff was worth, and base that on its “fair market value.” Most often Goodwill takes used but good-quality clothing, small appliances and household goods that can easily be transported. If you’re not sure what “fair market value” means, it simply is what it’d be worth in a thrift store. That’s the amount you could claim on your tax form, and if you’re still not sure, she recommends talking with your tax advisor. Though some of the tax rules have changed a bit this year, you can still donate your old car to Goodwill. There’s a program at Goodwill in Iowa called “Wheels to Work.” Clients in that program may be provided with a donated car so they can get to work, take children to school or take a family member to work at a job. Goodwill may fix up that car and use it in the program or may sell it at auction and use the proceeds to rehab the other cars they keep. As with other donations, you can deduct the car’s “fair market value” on next year’s tax return.
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