One Man’s Trash is Another Man’s Treasure

More often than not, my clients need some motivation to help them take the first step in getting personally organized.  Once it took motivation just to get the client to let me in the door.  She actually positioned herself like a big “X” in the doorway to stop me from peaking into her world of chaos.

While I might envision a “cattle prod” or a back hoe, I usually engage a more empathetic and sensitive approach.   My favorite is the tax deduction incentive plan; aka, one man’s trash is another man’s treasure.

Did you know that the second most overlooked tax deduction allowed by the IRS is called “Non Cash Contributions to Non-Profit Organizations.”  In plain English, any unwanted household items, clothing, books, appliances, toys - basically anything but cash – can be donated to a non-profit group. 

To take full advantage of the deduction, you must create an inventory.  Time-consuming – maybe.  Worthwhile – Absolutely!  Just do the following:

1. List each item.
2. Note the original cost of acquiring the item.
3. Assign a fair market value (The IRS’ standard is “would you wear another man’s underwear?”)
4. Add any comments that you think will sway a crusty, governmental auditor.
5. Attach to the non-profit organization’s receipt.
6. Drop in your Tax File (please tell me you have a tax file)
7. Wait until tax season to submit.

The total value of these items comes directly off your gross income.  In other words, your hand-me-downs (my Midwestern roots are showing) reduce your taxable income.  In some cases, the deduction can be significant.

In 2002, we helped a doyenne of East coast society clear her spacious mansion of unwanted ball gowns, furs, hats and other clothing.  She didn’t want to run into anyone wearing her cast-offs, so we shipped it back to a major university theater department in Chicago.  Her total fair market value tallied more than $60,000!  The FedEx charges were tax deductible, too.

In Chicago, we have an amazing array of non-profits serving diverse populations in need.  With a story or two about the abused women’s shelter or the latch-key after school program we can get the most reluctant client motivated.  Moms, note that this is a great motivator in getting your kids to get rid of unwanted toys and books.  Yes, kids have clutter, too. 

For a list of organizations in your area, Google your pet causes.  You’ll find a treasure trove of organizations eager to “re-purpose” your cast-offs.