Monday, April 14, 2014

When you run out of the usual tax deductions

     Being a homeowner, spouse, mother, etc., etc. has provided me with so many wonderful things, not the least of which is tax deductions.  However, as life moves forward, the marriage ends, the mortgage gets more paid off, the children move on, these tax deductions all but disappear.  I find myself in a place where I am finally making a comfortable living, but end up giving a lot to the government because I am lacking any real tax deductions.  Searching the tax laws and my "life" I have come across a very easy, yet beneficial tax deductions.  I accurately and consistently log everything I give to charity, including every pair of socks, belt, sweater or black and white tv.  By doing this on a monthly basis I end up at tax time with real deductions along with the documentation to prove it.  When Google started it's Google Documents with cloud storage I was playing around and discovered how easy it would be for me to create some simple tools to help me track my donations.
     First off, the tracking sheet.  I created a simple form with spaces for the month, day and year and a table to record the type of item and the quantity.  These I print out and use when I am bagging up the out of date, not my size, things I don't where anymore and those household items I need to get rid of.  The item type is pre-printed and to right is a cell to use hash marks for each sweater, pant or picture frame I add to the donation bag.  When I make my donation, I staple this form to the receipt I get from the charity.
The second document is a spreadsheet.  This is where the fun begins.  My first colum is the item type, then the quantity followed by the actual resale cost of the item in a second hand store.  Based on the formula I have behind the cells, the quantiy is multiplied by the single unit price and the fourth column is the total monetary value of that row.  Sweaters, quantity 3, unit price $8.00 equals $24.00 deduction.  I also have a formula at the bottom of the fourth column, totally all of the subtotals.  This total is transferred to the last worksheet where I have monthly totals for all of my donations and the actual total for the year.  This is my deduction for material goods I have donated to charity.
     I save all of the documents in the cloud in case I am audited and the receipts and tracking form are with my other paper documentation for that tax year.  Depending on what's going on and how much time I have to purge my belongings, I can get some pretty substantial deductions.
Every penny counts.

Pretty new decks!