The 'Scrooge' Strategy: How to Turn Your Old Junk Into a Tax Deduction

We break down the IRS rules for non-cash charitable contributions. Plus, here's a handy checklist before you donate to charity this year. When you purchase through links on our site, we may earn an affiliate commission. Here’s how it works. Anyone who’s a fan of holiday movies is no doubt familiar with Charles Dickens' "A Christmas Carol."The story is about how Ebenezer Scrooge, a miserly old man who swims through hoards of gold coins in some retellings, is transformed into a generous soul after he receives a visit from four spirits on Christmas Eve.While most of us probably hope we’re not as frugal as Scrooge, we still enjoy a good deal when we see one. That’s why his dramatic change of heart holds a critical tax lesson: The most powerful way to lower your tax bill this season may be to give.Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special IssuesProfit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.Profit and prosper with the best of expert advice - straight to your e-mail.By employing this "Scrooge Strategy," you can donate gifts, clothes, and other old "junk" to squeeze out one last tax break before December 31. It might not be mounds of gold, but hey — every bit helps, right?This article covers the federal income tax deduction. States may offer some variation of the charitable contribution deduction, if any. See your state's Department of Revenue or Taxation website for more information. We all have those items piling in the back of our closets waiting to be used. So why not donate them?Not only will you be helping someone in need, but you may be able to claim the charitable donation deduction on your 2025 federal income return if you itemize (rather than claim the standard deduction).Yet before we dive into the types of donated goods that qualify for a potential tax break, we’ll first need to lay out some ground rules. Namely, the IRS rules on the eligibility of donated goods employing the "Scrooge" strategy.You should keep detailed tax records of your donated goods. For example, if you donate $100 worth of old mugs to the Salvation Army, you'll at least want a description of the items, their value, and how that value was determined.Written acknowledgement is a requirement for any non-cash goods donated that are worth $250 or more. You can often get this written notice by asking the organization you donated to for proof of donation.Lastly, any one item or group of items worth over $5,000 must be appraised by a qualified appraiser to confirm their value (though most of us likely don’t have $5K lying around our closets, do we?). Note: Collectibles, fine art, and other items that are valued over $5,000 may only be deducted based on FMV if the charity uses the item in a related way. So, for example, if you donate a painting to a museum that uses the art on display, that could be deductible at FMV. Otherwise, your deduction may be limited to your original cost basis in the item. Just as Scrooge awoke on Christmas, relieved it was not too late to change his miserly ways, you also have time to make a non-cash contribution to charity before year-end. But you'd better hurry. The deadline to contribute for the 2025 tax year is December 31.Here's a checklist of items you may find in your attic or closet that could count toward the federal charitable tax deduction:CategoriesExamplesAntiquesVintage everyday items (kitchenware, furniture, militaria, rare books, etc.) Books & ToysGently used books, educational toys, etc.Clothing & LinensGently used shirts, pants, coats, towels, sheets, etc.CollectiblesReal silverware, coins, jewelry, stamps, high-value toys, rare memorabilia, etc.Electronics Working computers, TVs, etc.Fine ArtPaintings, sculptures, textiles, limited edition or original prints or drawings, etc.FurnitureGood condition tables, sofas, chairs, etc.Household GoodsKitchenware, small appliances, tools, lamps, etc.Sporting GoodsOld bikes, camping gear, exercise equipment, etc.While individually the items may not be worth much, the total value of your donated goods could quickly add up. And if you’re on the cusp of claiming the itemized or the standard deduction for the 2025 tax year, any extra donated goods could push you to itemize for a higher tax break. This could be particularly important given that new charitable deduction rules next year will further limit non-cash charity deductions.Starting in 2026, all itemizers will be subject to a new deduction floor of .5% of their adjusted gross income (AGI). Any charitable contributions (including non-cash) below this threshold will be non-deductible.Note: Appreciated stock, real estate, and other items that are typically not stored in the back of a closet or attic were excluded from this list. However, consult with a qualified tax professional before making a high-value donation, as different rules and tax planning considerations may apply. Although we covered eligibility rules and examples of what could qualify for a charitable contribution tax break, some additional IRS guidelines limit how much you can claim on your federal income return for your non-cash charity deduction.However, there may be a silver lining: If your donation exceeds your AGI for the tax year, the leftover amounts may be carried over into the future, up to five tax years. So if you plan to itemize again, your non-cash contributions could qualify on next year’s return — but even if they don't, your charitable intentions will surely be appreciated by the charity of your choice.Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.Kate is a CPA with experience in audit and technology. As a Tax Writer at Kiplinger, Kate believes that tax and finance news should meet people where they are today, across cultural, educational, and disciplinary backgrounds.

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