Donate for Tax Deduction or Sell for Cash?

I used to donate unwanted goods and deduct the charitable donation on itemized deductions.   Recently, I started to sell unwanted goods first before donating because I learned the return from selling was often higher than the tax savings from a deduction.

The higher return for selling always works with one takes the standard deduction since there is not tax benefit from a charitable contribution.

If one itemizes, then the tax benefit of claiming the fair market value (FMV) as a contribution is often lower than the price one will get from selling.   That's because the tax benefit will be based on one's tax bracket:  10, 22, 24, 32, 35 or 37%, which is often less than the selling cost less any selling related costs.

For example, I sell used clothing to a reseller of used clothing for 30-40% of their resell price.  At sports equipment reseller, they pay 30-40% of their resell price.  Assuming the resell price is FMV, then one receives more selling if they are in the 10-24% tax brackets.   One may or may not  make more selling if one is in the 32-37% tax brackets.

The return will be reduced by the cost of taking goods to a reseller.  Fortunately, resellers are within a 3 mile radius of my house and are on the way to grocery stores or other retailers.  So my additional cost is just time.

Finally, I save time by not having to claim charitable deductions for goods sold and receive cash immediately instead of as a tax refund.

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This is not financial nor tax  advice. Please consult a professional advisor.

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