If you hate dusting off your old books and like saving money on your taxes, donating them could save you hassle and money. However, if you don't meet the criteria and record-keeping requirements, the Internal Revenue Service might not let you claim a tax deduction.
Find a Qualified Charity
You can only claim a tax deduction for book donations made to qualifying charities. Examples of qualified charities that might be interested in books include schools, public libraries and nonprofit museums. Donations to individuals, even needy schoolchildren, can't be deducted. In addition, if you have the books appraised first, you can't deduct the appraisal costs. If you aren't sure if an organization qualifies as a charity for tax purposes, check the online "Exempt Organizations Select Check" on the IRS website.
Your donation value depends on how long you've owned the books and how the charity will use the books. If you've owned the books for less than one year, you can only deduct what you paid for the books or the fair market value of the books, if it's less than you paid. If the charity doesn't use your books to accomplish its charitable mission, you can only deduct what you paid for the books. For example, if you donate antique books to a school that auctions them off to raise money, you can only deduct what you paid for the books. However, if you donate the antique books to a museum that puts them on display, you can deduct the fair market value.
Receipts to Keep
Generally, you need a receipt from the charity to document your donation to claim it on your tax return. A receipt is sufficient if it includes the name of the charity, the date of the donation, a description of what you donated and whether you received anything in return for the donation. If you donate books that you think are worth more than $5,000, you also need to get an appraisal and submit it with your tax return. On the other hand, if your donation is worth less than $250 and it's not practical to get a receipt, such as if you drop the books at a book drop, you don't need a receipt.
Reporting On Taxes
Before you can claim your book donations, you have to give up your standard deduction. Charitable donations, including books, can only be written off if you itemize your deductions with Schedule A. On Schedule A, report the amount of your book donation on Line 17. If your donation exceeds $500, you must also complete Section A of Form 8283. If your donation exceeds $5,000, you have to complete Section B and include a qualified appraisal of your books with your tax return.
Video of the Day
- tax forms image by Chad McDermott from Fotolia.com