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The Tax Man Cometh

Offline Travis

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The Tax Man Cometh
« on: December 29, 2013, 08:50:43 PM »
As we approach the new year, I'm sure we all have our taxes in the back of our minds. Are you going to wait until last minute or get them done early? Do you do your own, hire a professional or use a service like TurboTax? Do you even bother filing taxes on the items you resell?

Offline alloro

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Re: The Tax Man Cometh
« Reply #1 on: December 29, 2013, 10:29:36 PM »
I do my own and I always wait until April to file them. I wait for two reasons. One, software updates do come out with corrections that if affected my return would force me to have to file an amended return. Two, the people over at the IRS are so tired of processing returns come April that they seem to be less picky about the small things. Every single time I've ever filed early I've been questioned on something.

Offline Travis

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Re: The Tax Man Cometh
« Reply #2 on: December 30, 2013, 12:03:55 PM »
the people over at the IRS are so tired of processing returns come April that they seem to be less picky about the small things.

I agree. I have filed my taxes at the deadline for several years. Never had a problem.

This year I should be getting money back so I'm filing January 1st. Probably use TurboTax again this year. It's pricey but it makes it so simple to find deductions.

Re: The Tax Man Cometh
« Reply #3 on: December 30, 2013, 12:05:12 PM »
I always file early as possible. I use TurboTax, but I don't know if I should do that this year because of the store. Lots of new variables involved with my taxes.

Re: The Tax Man Cometh
« Reply #4 on: December 30, 2013, 09:56:17 PM »
On the topic of taxes...  A month or so ago I dropped two trailer loads (6x10) full of thrift type stuff.  Donated the stuff to a church owned thrift store, and was given a blank tax write off form.  Guy signed it and told me to fill out what I was donating was worth myself.  Not sure if that is the norm or not, but it leaves me with a dilemma.  I have no idea what to put on it.  If I value the stuff too high I can see an audit coming, too low and money is left on the table.

What value would you put on it?  Was about 50% clothing, the other half made mostly up of things like picture frames, baskets, toys, craft supplies, quilts, etc.  (stuff I probably could have sold but would have taken forever to move...)

Offline Travis

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Re: The Tax Man Cometh
« Reply #5 on: December 30, 2013, 11:36:12 PM »
My former accountant said that donation write-offs are red flags and increase your chances of being audited. Not sure if that's true or not.

Re: The Tax Man Cometh
« Reply #6 on: December 31, 2013, 08:11:38 AM »
My former accountant said that donation write-offs are red flags and increase your chances of being audited. Not sure if that's true or not.

I've put thousands each year into my taxes as donations. I've never been audited. I think it depends on the proportion of donation amount vs. income, if at all.

The IRS has a guide on how to value things. I'm sure you don't have an itemized list. I would put a value of $750 a load. $1500 total.

IRS values clothes higher than you would think. Something like $4/jeans, $3/polo shirt.. You can look up the values and better estimate your write off.

Offline dbr831

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Re: The Tax Man Cometh
« Reply #7 on: December 31, 2013, 10:52:37 AM »
On the topic of taxes...  A month or so ago I dropped two trailer loads (6x10) full of thrift type stuff.  Donated the stuff to a church owned thrift store, and was given a blank tax write off form.  Guy signed it and told me to fill out what I was donating was worth myself.  Not sure if that is the norm or not, but it leaves me with a dilemma.  I have no idea what to put on it.  If I value the stuff too high I can see an audit coming, too low and money is left on the table.

What value would you put on it?  Was about 50% clothing, the other half made mostly up of things like picture frames, baskets, toys, craft supplies, quilts, etc.  (stuff I probably could have sold but would have taken forever to move...)

I think you are limited to what you paid for the stuff in the first place. Obviously if you value it too high it will raise a flag. Say you are claiming $200 expense for storage units and $250 deduction for donated stuff....not ok.

And to Travis.....seriously?  Did you have to bring this up already. I Hate tax time! No fun! In past years I have used TurboTax and definitely recommend it. Worth every penny. Took over a large family business in 2012 (Not related to storage unit purchases) and was definitely in over my head so paid a professional to do my taxes last year and will do so again.

Re: The Tax Man Cometh
« Reply #8 on: December 31, 2013, 11:28:57 AM »
I think you are limited to what you paid for the stuff in the first place. Obviously if you value it too high it will raise a flag. Say you are claiming $200 expense for storage units and $250 deduction for donated stuff....not ok.

And to Travis.....seriously?  Did you have to bring this up already. I Hate tax time! No fun! In past years I have used TurboTax and definitely recommend it. Worth every penny. Took over a large family business in 2012 (Not related to storage unit purchases) and was definitely in over my head so paid a professional to do my taxes last year and will do so again.

Not quite. The IRS has no idea what you're donating. As an individual, you are limited to donating 50% of your AGI (Adjusted Gross Income). So if you say you donate $50,000 a year but only make $40,000 a year, you will only get credit for $20,000 a year AND you raise a red flag.

Many people spread out donations over multiple years. You have 5 years to claim a donation. So if you donate a vehicle, for example, you can claim it once in the next 5 calendar years, or with help of an accountant, you can spread that over the next 5 years if you choose.

Re: The Tax Man Cometh
« Reply #9 on: December 31, 2013, 01:06:26 PM »
I can't see how the value of a donation could be linked to the original cost of of a unit.  It would have to be the real value of the goods.  I paid 1900 + taxes and buyers fee for the unit the donation came out of.  My ledger says $2550 but that includes all costs, gas, storage space, helpers, etc.  The goods donated was two loads out of seven I got from the unit.  (10x25 hoarder's unit literally full from floor to ceiling front to back...)  While I could value it at 2/7ths of the total, that doesn't seem close to actual value.

I'd sooner throw the donation receipt in the trash than deal with an audit, but I know I made enough on the side this year that tax time is gonna really hurt if I don't claim everything I'm legally entitled to.

Offline Alias300

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Re: The Tax Man Cometh
« Reply #10 on: December 31, 2013, 01:20:01 PM »
My taxes are easy this year.   I'm done.  Just need to plug numbers into appropriate space.  My medical expenses and sales tax exceeded income so don't even need donation write offs.  Will save those for future years....

And yes, donations from lockers are limited to what you paid for the unit.   Which is messed up because if you pay $100 for a unit that has $1000 TV you donate, write off can only be $100.    But you pay $100 for a unit that has $100,000 cash in it....you pay income tax on $99,900 of it.

Tax laws changed again.  Any donations over $500 need to be itemized.  At least snap photos as you unload so you have proof......

Nice little program (they now have an app, too).  You can print it out for your taxes or if you use turbotax it will import it for you....

https://turbotax.intuit.com/personal-taxes/itsdeductible/

Re: The Tax Man Cometh
« Reply #11 on: December 31, 2013, 02:31:40 PM »
Where do you see that you can only write off the amount of the locker? I can't find that info.

Offline Alias300

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Re: The Tax Man Cometh
« Reply #12 on: December 31, 2013, 02:34:17 PM »
I'll have to search for it.  It buried in the donations section of the IRS website......
I'll try and find it and get back to ya.

Offline Alias300

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Re: The Tax Man Cometh
« Reply #13 on: December 31, 2013, 02:44:44 PM »
"If you contribute property with a fair market value that is more than your basis in it, you may have to reduce the fair market value by the amount of appreciation (increase in value) when you figure your deduction.

Your basis in property is generally what you paid for it. If you need more information about basis, see Publication 551."
........
Now this particular section is referring to items such as a painting.  You paid $500 but now worth $1000.....
But rules still apply.   

You can read up some in publication 526 but I've found elsewhere better definitions.....I'll track them down.

http://www.irs.gov/publications/p526/ar02.html#en_US_2013_publink1000229755


Re: The Tax Man Cometh
« Reply #14 on: December 31, 2013, 03:06:40 PM »
That's only for appreciating valued items. Items like clothing, housewares, home decor do not appreciate in value so you can claim fair market value.. See the following..

"Special rules apply if you contribute:

Clothing or household items,

A car, boat, or airplane,

Taxidermy property,

Property subject to a debt,

A partial interest in property,

A fractional interest in tangible personal property,

A qualified conservation contribution,

A future interest in tangible personal property,

Inventory from your business, or

A patent or other intellectual property."

The following link is for tangible goods as outlined above..

http://www.irs.gov/publications/p526/ar02.html#en_US_2013_publink1000229745

Because I can donate my whole store as "inventory from your business" and write off every dime even though I got most of it through storage auctions.


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