As a father to two small children, I know there is a large cost associated with parenting. I never would have imagined the cost of clothes alone. My son is three years old and grows at a rate of what seems like an inch a week. The uniform pants I bought him at the beginning of the school year resemble capris now. My daughter is just over one, and as the first girl in multiple generations of my family, everyone has been excited to buy pretty pink frilly clothes. Yet a lot of what they buy doesn’t match the seasonal weather in our area, so we have winter and summer clothes that have never been worn. The challenge my wife and I face is what to do with all of these extra clothes. 

I’ve narrowed it down to two directions - donation and consignment. I will evaluate the advantages and disadvantages of each. Hopefully your comments will help me make my choice.




Quick & Easy

Donation centers generally take everything regardless of the condition. This means you don’t have to sort through the items. It’s a quick and easy way to get rid of the clothes that are taking up extra space. When people think of donating clothing, the first place that comes to mind are thrift stores like Goodwill & the Salvation Army. However, there are many other charities to donate to. For example, many churches take in children’s clothes for mothers who can’t afford them. 

Tax Deduction

If you itemize your deductions, you may be able to claim the clothes you donate. In addition to children’s clothing, I have donated suits in the past to transitional men’s shelters. Wherever you donate, make sure to keep receipts to reference when you file your taxes.

Warm Fuzzies

I get a good feeling knowing that the clothes I donate are going toward the greater good. Some organizations use the proceeds from the resell of the donations to fund programs like job skill improvement, disabled veteran programs and even homeless shelters. Items that are simply taking up space can help change the lives of others.



But I Paid So Much

I spent a lot of money on these clothes and my little ones only wore them a few times. Would someone pay money for them? These are some of the thoughts I have as I pack things up to take to my local thrift store. 


You are required to keep track of your donations if you plan on taking an itemized deduction. If your total deduction for non-cash donations exceeds $500, include IRS Form 8283 with your tax return. Additional forms are needed if your donations exceed $5,000. The IRS requires that for contributions of cash or property worth $250 or more, you have a written record showing the amount of the cash or a description of the property. You also must note whether the organization provided any goods or services in exchange for the gift.




Show Me The Money

You spent quite a bit of money on these clothes, so it only makes sense to try to make some money off of them. Consignment stores give you an easy way to make a little money, and it can be more convenient than eBay or a yard sale. I’ve been surprised many times by how much money they have offered for my items in the past.

Revolving Door

With my kids, clothing is like a revolving door. I’m buying just as much as I’m getting rid of.  With the money I make from selling their clothes, I can put a dent in their wardrobe needs for the upcoming season.



Income Taxes & 1099s

Most of us won’t be making a large amount from consignment, but if you do, you will face income tax implications. If your consignment income exceeds $600 then you should receive a 1099 from the consignment store. 

Only What Sells

Consignment stores are in the business of making a profit and they have strict guidelines on what clothes they will take. If your goal is to simply get rid of as much clothing as possible, consignment stores may not be the best choice.


In the comments below, let me know what you do with your children’s old clothes.  Every week we bring you great information on financial literacy and taxes.  Stay informed by visiting the eSmart Tax blog and by following us on Facebook and Twitter.