CINCINNATI — After the holiday season, many of us haul a car load of unwanted clothing or household goods out to Goodwill, the Salvation Army, or St. Vincent DePaul.
Unfortunately, this year many people did not, due to a major change in tax laws.
And many charities are now begging for help.
Kim Davis just made her annual donation at Ohio Valley Goodwill.
"There are people who need the things I no longer need," she said, while unloaded two bags of goods from her SUV.
Tax change leads to empty bins
But the bins in the drop off area were mostly empty, because charitable donations no longer give most taxpayers a break, ending a major incentive to donate.
"The cars, on New Year's Eve, would be lined up around the building," Goodwill's Michael Flannery said. "That's because everyone wanted to get that receipt for their taxes so they could get the deduction."
But Flannery said with the recent loss of the deduction, things immediately changed for the worse.
Donations have been down sharply this new year, he said, because most people have lost the incentive to grab unwanted clothing and drive it to their local charity, especially during winter weather.
In addition, inflation has been hitting middle class families hard, leading them to hold onto their items longer. So it is a one-two punch.
And it's not just clothing donations that are down.
"The cars, the household electronic items, just are not coming in," Flannery said. "We are in a really bad spot."
And it may not improve: The IRS says that 90 percent of taxpayers areno longer able to claim charitable donationson their tax return.
Gina Pinto of Liberty Tax said "most people can't itemize any longer, and so there is no way to deduct what they give to charity."
Taxpayers had a temporary break last year
The law actually changed in 2019 for the first time.
But in 2020 and 2021, due to the pandemic, Congress allowed everyone a tax break for $300 in charitable donations, or $600 for married couples.
That break was not extended to 2022.
And you see it nowhere more than at Goodwill, where your donations help the homeless get job training and find jobs.
"We have never asked for money," Flannery said. "We want what you don't want anymore, so please let us do some good with it."
Even if you can't take a deduction, you are still clearing out your closets, and helping other people in the long run, so you don't waste your money.
____________________________
"Don't Waste Your Money" is a registered trademark of Scripps Media, Inc. ("Scripps").
Follow John:
- Facebook:John Matarese Money
- Instagram: @johnmataresemoney
- Twitter: @JohnMatarese
For more consumer news and money saving advice, go to www.dontwasteyourmoney.com
