OK – I promised you could make some $$ from your closet rejects. In these economic times, consignment stores are flourishing! Plato’s Closet (geared toward teens) and Clothes Mentor (geared more for adults) are making a big splash nationally as resellers of gently used clothes. They are picky about what they take, but if you or your kids have fashion-forward items, you can make money from your castoffs. There are many other independent consignment stores around, so check out the options your area.
If you simply donate your clothes to charity, and you itemize your deductions for taxes, then you are probably missing out on a big tax break. After a closet audit, my clients routinely take bags of clothes to the Salvation Army or Goodwill but many either don’t ask for the receipt for tax purposes or underestimate the value of the items they donate.
Try the free It’s Deductible program to accurately track the value of your non-cash donations. You’ll be surprised at the correct resale value of common items as authorized by the IRS. For example, a high quality woman’s blazer is valued at $22 and $9 for a donated high quality men’s polo shirt. (I would have underestimated both.) The online It’s Deductible program (run by Intuit and TurboTax) ensures that you correctly track your donated items (not just clothes!) and lets you squeeze every legally deserved tax savings from your donations.
I’ve had clients realize tax savings up to $2500 just from cleaning out the closets and tracking their donations!