HeartWork Organizing

Helping you find peace and purpose through organization and design

Forget Resolutions: Do This One Thing and Sleep Easier January 2, 2012

Filed under: Business Organizing,Financial Organizing,Organizing — HeartWork Organizing @ 1:53 pm
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HAPPY NEW YEAR!!! 

How to store tax files for 2012And, by the way, forget the resolutions.  Who ever thought up that idea, anyway?

But here is one thing you can do in three minutes or less that can make a real difference for you this year.  Not kidding.  Right now.  Read this, and then run to find your nearest file folder, oversized envelope, or empty box.  Yes, you can even repurpose a gift box if you need to.

Use any box, file, or envelope you have for tax files

Label this folder, oversized envelope, or gift box with a thick, dark marker:  TAXES, 2011.

Set this folder, envelope, or box aside in your home office, or near where you process your mail.  If you share your home, let your spouse know where this is and what it is for.  Start filling it with items you might need to file your taxes this year.  You’ll start gettting these items in mid-January, possibly through February.  You might already have a few receipts or pages to add right now.  But if not, you’ll find them over the next few weeks.  When you find stuff that is or might be tax related, just pop it in here without worrying about organizing it.  Get something in email that you might need?  Save your sanity today by actually printing it out and popping it in the safe spot you just created.  Do you run a small, disorganized business from home?  Start pulling all of your records together now, and you’ll have what you need come crunch time.

Important tax records include W2’s, 1099’s, receipts for charitable gifts and donations, 529 records (contributions or expenses), end of year banking statements, refinance records, energy-saving home improvement records from the past year, and, of course, any unreimbursed work expenses.  If you aren’t sure whether it might be tax-related, pull out last year’s (2010) tax return and use that as a guide.

Don’t organize this stuff until you get ready to prepare your taxes; you are weeks away from that.  Right now, you are just trying to corral the little buggers that you’ll need for your 1040.

There.  Done.  You’re all organized, and it’s only day 2 of the new year.  Good for you!

 

 

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Make Room by Making Charitable Donations December 13, 2011

Filed under: Organizing — HeartWork Organizing @ 2:07 pm
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December is the perfect time to get organized.  You may not feel like you have much time, but chances are you can find $50 or $100 or more hidden inside your home in just a matter of minutes.  Here are some ways to do good and do right by your home at the same time.

Donate Toys

Now is the best time to tackle toys.  Go through the piles of toys with your kids and see what they are willing to part with.  Even if it’s just one or two things, you’ve planted a seed with them that they don’t have to keep everything forever. My four year old and I went through our books this week and decided to part with only three books.  That’s ok for now.

Donate Clothes

Tweaking your wardrobe can be painless.  Keep an extra hamper or shopping bag in your closet for clothes that you’ve outgrown, that are hopelessly out of style, or are beyond repair.  If you have a laundry room, you might keep a donation bag there to catch items before they get put back in closets and drawers. Once a year, or more often, the bag will be ready to take to the car and a donation drop point. December is a good time for charitable donations.

Donate Household Goods

Household and decor items that you aren’t using but are still in good condition can be passed on.  Just because that lamp that you can’t stand doesn’t fit your style, doesn’t mean that a DIY-er like me can’t bring it to life again.

Donate Just a Little

If the thought of making a charitable donation run makes you think BIG ORGANIZING PROJECT, don’t sweat it.  Just set the timer for 15 minutes, grab a box,  and run around your house with an eye to remove one, two or three items from each room.  Removing just one box or bag of unwanted items frees up space in your home and cash in your tax return.

Document Donations Properly

These items can pay you back in cash when you do your taxes.  Read how charitable donations on your taxes work.  Just be sure to document your donation with an itemized list for charitable donations and a receipt from the charity you donate to.  Taking a picture of the donated items if you have an especially large haul is also a good idea to provide even more documentation.

Donate to a Good Cause

Two of my favorite donation points are Goodwill Industries, because they take nearly everything, and Impact Thrift Store, because they will often schedule a pickup to include larger items like furniture.  If you are scheduling a pickup, do it now with plenty of time to get that end-of-year tax write off.

 

Is it Better To Consign or Donate? The Economics of Purging September 8, 2011

Babies don’t stay babies for long. My babies have grown out of baby bug rattles and what seems like thousands of adorable outfits.  I can’t store them all, so I thought I’d try consignment sales. My clients are often tortured with the idea that by donating their goods, they are somehow losing money.   Is selling at a consignment sale or store, on eBay, or on CraigsList any better? I decided to run the math on my own involvment in a community consignment sale and see how it compares to donation values.

Let’s set aside the emotional distress tied up in pawing through teeny tiny clothes, hand-knitted sweaters and beautiful booties. Look, I’m a professional, and even I did a mini fashion show for my husband as I tagged items for sale. (Aaaaw, remember her in this cute little outfit? It hardly looks worn!)

Let’s examine facts. I had about 250 outfits, shoes, and baby gear that were consignable:  in good shape, no stains or tears, matched in complete outfits, and basically looking like-new.  I signed up to be part of a local one-day consignment sale, but working with a consignment store is similar.

First came the scramble for child-sized hangers. Clothes on hangers tend to sell better. Every dollar spent on prep reduces profit, so I scoured Freecycle and hit up friends and clients, but it was tough coming up with enough extra hangers.  I used adult hangers for many outfits.

Using straight pins to attach sale tags is tough on the buyers. One DollarTree package of safety pins, cost, yep, just one buck. Sale tags were provided by this event host, but some sales require consignors to print tags at home, adding paper and printer ink costs.

Then came the real cost. Little outfits had to be unpacked, put on hangers, steamed or ironed, grouped and priced. I spent at least 10 hours, maybe 15 hours or more.  At minimum wage of $7.25 my “cost” for time spent would have been at least $73 bucks.

Last, I trekked to the sale site for drop off. Loading items and delivering to the sale site took a little more than an hour, so rack up another roughly $10 in opportunity cost and aggravation.

Now comes the fun part. Each sale works a bit differently, so read up on what’s available in your area. This sale gives 60% of the proceeds back to the consignor, which is pretty good.  I opted to volunteer at the sale and earn a higher percentage of the earnings, in my case 75%.  I donated two hours of time for greater profit and an additional shot at end-of-day markdowns.  I scored big, getting an all-wood three-piece play kitchen, which I look forward to repainting “Pottery Barn Pink”, for just $10.

I priced just about every item at $2. Price items to sell, for sure. Remember, folks, pricing something unreasonably high at a consignment sale actually lowers your chance of earning any profit at all. Most people come to these sales for deals and steals, so play along or don’t play.  And really, you’re done with it, so let it go and feel happy it’s getting another life.

  • potential gross = $500
  • potential take = $375 (that’s 75%)
  • potential net (minus my costs) = $292

My results?

  • actual gross = $192
  • actually paid to me =$144
  • actual net (minus my costs) = $61

I’m not surprised that $61 is just about what I spent that day at that very same sale. I received a check two weeks later. Unsold items can be donated by the host, but I picked up mine to take to another sale or perhaps donate for the tax deduction.  That means I dragged home 150 outfits, which was no easy haul back out to the car.  They are still worth another roughly $75 back on my taxes when properly documented.

So was it worth it? About one-third of taxpayers itemize deductions, and we can claim charitable donations on Schedule A. If I had bagged and dropped off those same 250 items at my local Goodwill, I would have been able to assign a thrift value to them of the same $2, and taken the deduction on my taxes next April.  My donation would have reduced my taxable income by the value donated ($500), and reduce my tax bill by roughly $125. (Note: Taxes can be confounding.  Please talk with a tax advisor for specifics.)  Hmmm, that is suspiciously close to my net earnings on this sale, but without the time that I spent preparing, dropping off and collecting my unsold items, and volunteering at the event. Click here for one guide to donation values.

So should you or shouldn’t you?  If you enjoy consignment sales, if you could use the cash more than the time, or if you have some trendy, high-quality items that you know people are willing to pay top dollar for, then go the consignment route. I appreciate it, because I’ll probably be buying your stash.  Watch out for emotion, though, since the longer you wait to consign, the less likely your stuff will be current and desirable. If, however, time is more valuable to you, then donate your goods to a charity like Goodwill or any local charity that will provide a receipt for tax purposes, knowing that the financial outcome to your bottom line will likely be about the same.