The altruistic high you get from donating clothing to charity is only enhanced by the knowledge that a tax deduction can be earned by that same act. A great way to ensure your records are complete is to create an itemized list of your donation before it goes to the organization. The Internal Revenue Service requires that household items to be deducted be in at least good, as opposed to fair or poor, condition. Your list should contain a condition and a valuation for each item.
Notate each item. Valuation sources distinguish between a women's top and a dressy blouse, for example, so be specific.
Record the condition of each item.
Write down the value in accordance with your valuation guide of choice. Some charitable organizations, such as Goodwill and Salvation Army, publish guides online or in printed form. The online tax filing services of Intuit (TurboTax) and H&R Block both publish valuation tools named ItsDeductible and DeductionPro, respectively.
Store your itemized list with your tax paperwork once you have filed.
- Online tools ItsDeductible and DeductionPro allow you to record and assign valuations to your donations throughout the year. With ItsDeductible, at tax time, your list of donations with valuations can be easily imported to the charitable deduction section of Schedule A (Itemized Deductions) in your online return. CharityDeductions.com also allows you to create donation lists with valuations.
- Don't forget to get a dated receipt from the charity when you donate. Attaching the list of donated items to the organization's receipt is a good way to track your donation activity for the year.
- If you end up donating items worth more than $500, you have to file IRS Form 8283, to which you can attach your itemized lists for the year.