Family Finance Blog

It’s spring cleaning time and garage sales are popping up all over the place. They are fun to go to, and you get amazing deals sometimes. You’ll find gifts that have never been opened for 10% of the price new, or sometimes even less. I don’t do the garage sale thing often because we try to keep our home simple and clutter free, but I do enjoy them when I go.

I also used to think they were a great way of getting rid of things and making a little money on the side. I’m not so sure anymore. Last year my wife’s family cleared out a huge bunch of stuff from their garage and sold it in the garage sale. We put it all out, made up prices for it and at the end of the day we had $300 that we didn’t have before. Great, right?

Six people worked for a day and a half to get the stuff out of the garage, sort it, make up prices, and then man the garage sale all day. We had lots of people come by, and they bought things, but we eventually lowered prices, which helped our sales volume. We were selling pairs of shoes for $1 (sometimes in very good shape), bags of clothing for $2, and other things at $0.50 or $1 at a time. Otherwise we never would have gotten rid of the stuff.

The other way to get rid of the stuff

At the end of the day, we were all tired and worn out from working so hard and being in the sun all day. But we made some money, which was nice.

It got me thinking, though. They have a mortgage, they are obviously going to be itemizing deductions. How much could we have “made” in tax relief at the end of the year if we had just donated the entire pile of stuff?

Every year I buy Turbo Tax Deluxe and use it to do my taxes. It costs me a bit of money, but the time saved is absolutely worth it. I don’t spend the money on electronic filing, I just mail it in, so I only pay the costs of the software.

It comes with access to It’s Deductible, their way of helping you determine how much the stuff you donate is worth. I was surprised at just how much you can deduct for some things. For example, women’s jeans is very good shape get you a $14 deduction. In decent shape it goes down to $6, but it is still a lot more than we were getting at the garage sale where we were selling bags of clothes for $2.

So here’s just a summary list of some of the stuff we had, and how much we could get for it. I’ve just put some averages together, and assumed only medium quality for all items. Some of the items were high quality which would get twice the deduction. The software is very specific and can give you some great values on very specific items.

OK, so we’re able to deduct about $1430 for what we donated (and I know I skipped a lot things since I was doing this off the top of my head.) If we’re in a 25% tax bracket, we just saved $357.50 on our taxes, more than we made on the garage sale and with almost zero effort. All we would have had to do in this case is get the stuff out of the garage, take some pictures of it to catalog it, and send it off to the charity, most of which will pick the stuff up from your door.

So the take home message from all of this is that if you are considering a garage sale, and you itemize your deductions on your taxes, you should strongly consider donating your items instead. You may make more money for less effort, and a charity can also make money at the same time. Sounds like a great deal to me!

This entry was posted on Thursday, June 7th, 2007 at 8:13 am and is filed under Tips, Money Saving, Housing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.