Donating things that you no longer want or need to charity is an excellent way to help those in need while also clearing your house of clutter and perhaps getting a nice deduction on your taxes. However, there are a few things you’ll want to keep in mind before you load up the car to drop off your donations.
Find out if the charity of your choice can accept your donation. If you are donating to a charity that runs a thrift store, such as Goodwill or the Salvation Army, you should be aware that they often decline to accept items that they are unable to sell because of safety concerns or lack of demand such as infant car seats and certain electronics.
Other charities that give donations directly to those in need might have to decline items because of a lack of storage space or because they only distribute certain items. For example, many toy drives only accept new, unopened toys and many homeless shelters lack space to store clothing and instead give their clients vouchers to clothes closets run by other charities.
To save yourself a trip, consult the charity’s website or call to find out if your donation can be accepted. Don’t be insulted if they can’t accept what you are offering, it’s nothing personal, just that it doesn’t work for them at the present time.
Make an inventory of what you are donating. This will make it easier to get a receipt for your donation and to fill out your tax forms if you are writing your donation off on your taxes.
An easy way to make an inventory is to create a spreadsheet with fields for the item description, approximately when you bought it, how much you paid and the fair market value.
Many charities leave it up to you to fill out the receipt; if this happens, you can just list the items that you gave and the quantity and use your spreadsheet as a backup for your taxes. For example, you could write “4 women’s blouses, 5 pairs of kid’s jeans, 2 pairs of men’s shoes” on the receipt.
You will need to determine the fair market value of your donations if you’re writing it off your taxes. However, before you go through all of this effort, make sure that you will be itemizing your taxes rather than taking the standard deduction. You are not able to write off charitable donations if you are taking the standard deduction.
If you are donating more than $500 in goods, you’ll have to fill out IRS form 8232. It is simple to fill out especially if you’re using tax preparation software to file your taxes. Some programs will even help you determine the fair market value of what you’ve donated.
Don’t worry if you don’t have software that will do this for you, as there are resources that will help you put a value on what you’ve given. The Salvation Army and Goodwill both provide guides that list price ranges for second hand goods sold in their stores. You don’t have to donate to either of these charities to use these lists. Please note: you can only write off the value of items that are in “good” condition or better.
Special rules apply if you are donating items with a fair market value of over $5,000 such as a car or valuable jewelry or if you are claiming a deduction of more than $5,000 for a group of items. Please consult a tax professional if you are making such a sizable donation to make sure you get the deduction you are entitled to. Additionally, many charities can help you find an appraiser who is experienced with filling out the proper IRS appraisal forms that you’ll need to take your deduction.
Miscellaneous Tips to Keep in Mind:
- Do only donate items that are clean and in good condition, but don’t worry about re-washing clothes that have been put away clean and kept protected from dust and pests. Almost everyone will wash them again as soon as they get them home from the thrift store or charity.
- Stuffed animals can be hard to give away! Some thrift stores no longer take them because they have such a glut. Many hospitals are unable to take them because many of the patients are in such fragile health; however you can try calling police and fire stations to see if they could use them.
- Animal shelters and rescues can often use old worn out towels and blankets. You will not be able to get a deduction for these unless they are in good condition, but it’s still a good way to give old textiles one last use before hitting the landfill.
- Likewise, some charity thrift stores resell bulk worn out clothing to be used to manufacture things like carpet pads. Call to ask if they can use your torn and stained clothing – you won’t get the write off, but you’ll be helping the environment by recycling.
- Try Freecycle or Craigslist to get rid of oddball bits and pieces. You’ll never know if the box of assorted junk that you’ve been storing in your attic could be turned into an interesting sculpture by an art student!
- Ask your child’s school if they participate in programs to recycle old cell phones and computer equipment. They will often get a small reward for sending in electronic scraps.
That’s all I have. Do you have any more tips for getting deductions for your donations?
Photo Credit: Eric__I_E