Better to Sell the Stuff on Ebay or Donate for Tax Right-off

[braingrenades]

Cleaning out a bunch of closets at home and trying to get rid of a number of things. Is it in my best interest to put time and energy into listing this stuff on Ebay or better just to donate and shoot for a tax deduction? I've sold things on Ebay in the past and the numbers can add up but don't have much experience with donation tax deductions.

[whateverdude]

All depends on how much the stuff you're getting rid of is worth, and what your time is worth.

If you've got some expensive clothes/items that are worth your time for listing, packaging, and shipping on Ebay, go that route.  Otherwise, the donation process is simple (assuming you're in the US).

You go to Goodwill/Salvation Army (read on their website the requirements for donations), give them your stuff, and they give you an itemized form of everything you donated.  Typically you just estimate how much everything is worth.  Keep the form, and you use that when you file your taxes for the write off.

[ysette9]

This will be highly dependent on the type of stuff you have to get rid of and your household income. In our experience last year, I determined that it absolutely was not worth my time and trouble to document everything we donated to Goodwill. Nothing was particularly expensive and the process of itemizing everything twice (one on the receipt and once in TurboTax) was absolutely not worth the small amount we got off of our taxes. That is just my personal experience though. Your mileage may vary.

[johnny847]

First things first. Do you actually itemize your deductions? Because if you don't you'll get squat for donating.

[Spork]

First things first. Do you actually itemize your deductions? Because if you don't you'll get squat for donating.

Came here to say this.  It had already been said.  Done.

[MoonLiteNite]

First things first. Do you actually itemize your deductions? Because if you don't you'll get squat for donating.

I have put in donations before, up to around 5k 1 year, and never saw any change in my rebate/amount owed.
I have head of having to itemize, but i dont even know what that meant.

One reason why i don't even bother getting recipes when i donate, i figured you had to donate gobs of money to really even see a dent in taxes. like 1000$ in donations is 1$ saved in taxes or something

[Pigeon]

This will be highly dependent on the type of stuff you have to get rid of and your household income. In our experience last year, I determined that it absolutely was not worth my time and trouble to document everything we donated to Goodwill. Nothing was particularly expensive and the process of itemizing everything twice (one on the receipt and once in TurboTax) was absolutely not worth the small amount we got off of our taxes. That is just my personal experience though. Your mileage may vary.

I found just the opposite to be true.  I use the "It's Deductible" feature with TurboTax.  When I donate (mostly clothing), I just make a sheet with broad categories, like Woman's pants and put in hash marks as I sort the clothes.  If anything was very high quality, I note that, but mostly it's average quality stuff.  Our Salvation Army gives a coversheet that says "X bags of clothing" and stamps the list I provide.  I find values in It's Deductible.  The whole process is very fast and easy, and it ends up always being a much larger deduction than I would have guessed off the top of my head.

I generally don't sell too much because it's time consuming and I find the fees for ebay are ridiculous, on top of the hassle of shipping.  I have had some luck with Craigslist and a local neighborhood "garage sale" Facebook group for furniture, appliances or kid stuff.

[johnny847]

First things first. Do you actually itemize your deductions? Because if you don't you'll get squat for donating.

I have put in donations before, up to around 5k 1 year, and never saw any change in my rebate/amount owed.
I have head of having to itemize, but i dont even know what that meant.

One reason why i don't even bother getting recipes when i donate, i figured you had to donate gobs of money to really even see a dent in taxes. like 1000$ in donations is 1$ saved in taxes or something

I assume that you're using tax software and not doing your taxes by hand.

This is a disadvantage of using tax software. It teaches you absolutely nothing about taxes.

Every year, you're given a choice. You can either take the standard deduction, which is $6300 for single people and $12600 for married filing jointly (MFJ), or you can itemize your deductions. You can find the full list of things you can itemize on schedule A, but the most common ones are state income tax, state sales tax if you live in a state without income tax, state property tax, mortgage interest, and donations to charity.

So if the sum of all of your itemized deductions do not exceed your standard deduction, you should not itemize and you should take the standard deduction instead. This is the reason you never saw any change in your tax liability.

Conversely, if the rest of your itemized deductions do exceed the standard deduction, every charitable donation you make will reduce your tax liability by your marginal rate * charitable donation. So if you donated $1000 and you're in the 15% tax bracket, you'd reduce your federal tax liability by $150.

[Spork]

First things first. Do you actually itemize your deductions? Because if you don't you'll get squat for donating.

I have put in donations before, up to around 5k 1 year, and never saw any change in my rebate/amount owed.
I have head of having to itemize, but i dont even know what that meant.

One reason why i don't even bother getting recipes when i donate, i figured you had to donate gobs of money to really even see a dent in taxes. like 1000$ in donations is 1$ saved in taxes or something

If you're married/filing jointly your standard deduction is $12,600 ($6,300 for single).  That means any deductions have to add up to more than that before they really mean anything.  Deductions may be your "stuff" plus allowable medical expenses plus property taxes plus mortgage interest plus ...

Once you get that magic number, you're not still getting dollar-for-dollar.  Every dollar of deduction will take a dollar off your gross income.  This means if you are in the 15% tax bracket and you have $15,000 worth of deductions, then they are "valued" at $2,250 (because that's how much tax it saves you.)

In other words: If you're not going to have enough stuff to itemize, then it is better to sell it.  If you can sell it for more than 15% of it's value, then it's better to sell it.

There are clearly other factors here, too.  Maybe giving to a particular charity makes you feel good.  Or maybe the act of selling is a pain in the ass and makes a giveaway worth more to you.

[Reynold]

This will be highly dependent on the type of stuff you have to get rid of and your household income. In our experience last year, I determined that it absolutely was not worth my time and trouble to document everything we donated to Goodwill.

We did a garage sale one time, and decided it was not worth the time and trouble to try to sell things that way.  Despite having near continuous traffic (it was a neighborhood one), we only got a few hundred dollars for probably 30 hours of time to clean, sort, label, borrow tables, lay out, and repack the 70% of stuff still left after the sale.  For an hour or so entering it in Its Deductible, we get a pretty high value, and about the same amount off our taxes as we could have sold it for, with the advantage that we can just bag it and get rid of ALL of it, not just a subset.  We are in a high enough tax state with high enough income that even without a mortgage we itemize, so donations work out pretty well.

For my in-laws, they are older, get the higher standard deduction, have lower taxes, and it hasn't made sense for them to donate for a long time, so as others have said it is very dependent on your tax situation. 

[Spork]

This will be highly dependent on the type of stuff you have to get rid of and your household income. In our experience last year, I determined that it absolutely was not worth my time and trouble to document everything we donated to Goodwill.

We did a garage sale one time, and decided it was not worth the time and trouble to try to sell things that way.  Despite having near continuous traffic (it was a neighborhood one), we only got a few hundred dollars for probably 30 hours of time to clean, sort, label, borrow tables, lay out, and repack the 70% of stuff still left after the sale.  For an hour or so entering it in Its Deductible, we get a pretty high value, and about the same amount off our taxes as we could have sold it for, with the advantage that we can just bag it and get rid of ALL of it, not just a subset.  We are in a high enough tax state with high enough income that even without a mortgage we itemize, so donations work out pretty well.

For my in-laws, they are older, get the higher standard deduction, have lower taxes, and it hasn't made sense for them to donate for a long time, so as others have said it is very dependent on your tax situation.

[as always, double check my math... I'm terrible at transposing numbers.]

Just to be clear... If you are in the 15% tax bracket, this means that in order to be equivalent to selling it at a garage sale for $300, you would have to deduct $2000.  The time savings is clearly worth something, I don't mean to say it isn't.  But it is not a dollar-for-dollar comparison here.

300 / .15 = $2000

[Pigeon]

This will be highly dependent on the type of stuff you have to get rid of and your household income. In our experience last year, I determined that it absolutely was not worth my time and trouble to document everything we donated to Goodwill.

We did a garage sale one time, and decided it was not worth the time and trouble to try to sell things that way.  Despite having near continuous traffic (it was a neighborhood one), we only got a few hundred dollars for probably 30 hours of time to clean, sort, label, borrow tables, lay out, and repack the 70% of stuff still left after the sale.  For an hour or so entering it in Its Deductible, we get a pretty high value, and about the same amount off our taxes as we could have sold it for, with the advantage that we can just bag it and get rid of ALL of it, not just a subset.  We are in a high enough tax state with high enough income that even without a mortgage we itemize, so donations work out pretty well.

For my in-laws, they are older, get the higher standard deduction, have lower taxes, and it hasn't made sense for them to donate for a long time, so as others have said it is very dependent on your tax situation.

[as always, double check my math... I'm terrible at transposing numbers.]

Just to be clear... If you are in the 15% tax bracket, this means that in order to be equivalent to selling it at a garage sale for $300, you would have to deduct $2000.  The time savings is clearly worth something, I don't mean to say it isn't.  But it is not a dollar-for-dollar comparison here.

300 / .15 = $2000

I find that while no, it isn't a dollar for dollar comparison, it's much faster and easier to generate the $2000 in deductions than it is to actually sell $300 worth of the stuff.  Of course, it depends on what the stuff is.  If it's a small number of higher value things, it may be worth selling.  If it's normal (non-designer) clothes and miscellaneous household stuff, the resale value is low.

[nobody123]

I find that while no, it isn't a dollar for dollar comparison, it's much faster and easier to generate the $2000 in deductions than it is to actually sell $300 worth of the stuff.  Of course, it depends on what the stuff is.  If it's a small number of higher value things, it may be worth selling.  If it's normal (non-designer) clothes and miscellaneous household stuff, the resale value is low.

My wife and I used to try to sell stuff on our neighborhood FB swap site.  It was a total PITA. Everyone wanted things for pennies, wouldn't show to pick things up, etc.  Now she takes the kids clothes to a resale shop that pays her cash on the spot (ends up to be about what the net write off for donating it would be), and anything they don't want goes to the Salvation Army.  We itemize, so she makes a list and we attach it to the receipt they give us.  It takes like 30 minutes or so to enter that data into my tax software when I'm filing, and it gives us the valuation to use for the donation.  Plus, you get to deduct the mileage when you go to drop the stuff off.