I am cleaning out my closet before the end of December and taking it to the local helping hands store. When you deduct charitable donations of clothing at tax time, do you just guess at what they are worth? William Lewis, author of Cash for Your Used Clothing, says most people underestimate the worth of such items.
Before you donate, price each item against similar ones sold at the store where you drop them off. If you're in a 28% tax bracket, a donation worth $400 will earn you a tax deduction of at least $112. I have done this for the past two years and have saved on our income tax with a computer program, "It's Deductible".
By Bobbie G from Rockwall, TX
Ask a QuestionHere are the questions asked by community members. Read on to see the answers provided by the ThriftyFun community or ask a new question.
I am the director of a non profit school for students with autism. We recently received truckloads of furniture and so forth from a local business and I need to write their donation form. Do you have a place on here where I can look up an estimated value of these items? Thanks!
By Amy from PA
Hello, Amy. I did not read MCW's links but let me share with you my personal experience as a public service, non profit agency, employee for assigning "values" of donated materials . Don't do it without the accountable advice of a tax professional.
As a receiver of donations, your responsibility is to acknowledge the receipt of such and not necessarily to assign a value to such, after all, it is the giver - not the receiver, in most donation collection ventures that gets the tax breaks. And let's face it, unless it is cold hard cash, the value is subjective at best.
We put the responsibility of value assessment on the giver, leaving the value amount blank and stating that the value assessed was that of the giver, i.e.: the one who got the tax break.
This was back in the 80's and 90's, so do research the current day of legalities on this matter before taking my word as gospel, just take care to not get caught up in what could come back to haunt you via an IRS audit issue. Take care and proceed smartly. Best of wishes.
The company donating must have an appraisal if the combined value is over $5,000. There is a IRS publication 561 about donations and fair market values. There is also a Form 8283 they must have to claim the donation. It is their responsibilty not yours. You can list what they give you and look for the "used" prices items in good condition or better would fetch on the local market.
What is the value of yarn to be donated to a charity? I have a large box filled with yarn for donation, as well as, patterns, knitting needles, and latch and crochet hooks. The yarn varies, some wool, some nylon, etc. and varies in color, but most is enough to make something.
By A Cohen
When I used to donate things if I wanted a receipt for tax purposes, I was told to estimate what you think the items are worth, you do a lump sum, not for each item.
Guesstimate the weight of the yarn (by types), the number of knitting needles, latch hooks, and crochet hooks (by size), then do a search on the Internet for comparable values of these items. Those figures will give you a good idea about the value of your donations.
ThriftyFun is one of the longest running frugal living communities on the Internet. These are archives of older discussions.
How can I determine the fair market value for a car seat, infant swing, infant walker, and exercise equipment?
How can one best determine fair market value of vintage furniture (wicker) donated to charity?
How do I value clothing items I've donated throughout the year? I took pictures of each item for our records, but now I need to put a value to each item.
To help you determine your donations "fair market value", Goodwill provides a "Value Guide" and offers average prices in their stores for items in good condition.