Back in March, we covered the reporting and record-keeping requirements for non-cash charitable contributions.
Now we will focus on how you can determine how much your charitable contribution is worth. What is the true value of that nearly-new suitcase or the blouse you’ve owned for twenty years?
The first thing that you must consider is the condition of the object your are donating. Federal law permits taxpayers who itemize to claim deductions for clothing and household items they donate to qualified charitabke organizations, so long as said donations are in good, used condition or better.
Goodwill Industries offers a guideline for donors to determine what they can and cannot donate, and what (if anything) they need to do prior to dropping their donations off. Though these are the company-wide guidelines for Goodwill, these criteria are a good rule of thumb to follow when donating to any charitable organization.
The second thing you must consider is the value of the items in question. You may have paid $300 for that nearly-new suitcase when you bought it last year, but that doesn’t mean you can claim a $300 deduction on your taxes! So how do you determine the worth of your used donations?
Goodwill Industries is trying to make the process easier for donors. The charitable organization has put together a list of the typical value of most items (considered in good condition) and has it available on their website to help taxpayers determine how much they can deduct for their donations. You can check the list out here.
It is up to you to keep track of what you donate and to whom. Make sure to keep a record of everything you donate (either a written list or pictures of the items) and to obtain a receipt from the charitable organization when the items change hands. It is imperative you keep the proof of your donation with the rest of your tax documents in case the government asks you to substantiate your claim. The amount of documentation you need depends on the value of the donation in questions. For information on record-keeping requirements, check out our blog article “How to Account for Non-Cash Contributions.”
As always, our team is here to assist whenever you need us. If you have further questions on charitable donations (or anything else!) please let us know.
Sources:
Taxes and Your Donation (Goodwill)
Related Posts:
How to Account for Non-Cash Charitable Contributions
by Jami Taylor
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