Works-For-Me Wednesday: Claiming donated items on tax returns

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Did you know that if you itemize your tax deductions, you can claim donations to charities?

To do so, you need to make a specific list of what you are donating and get a receipt when you donate the items. When we have done it, we have simply listed “5 boys’ shirts; 6 men’s slacks,” etc. The recipient does not assign a value to what you have donated: you must do that. There are guides for how much you can claim for donated items at the Goodwill site and the Salvation Army site. I imagine you can use the same guidelines if you donate to a local rescue shelter or children’s home.

For example, you can claim $2-12 for a shirt, $2-10 for pants, $3-20 for a dress, depending on the condition. That’s more than you could make at a yard sale on those items. Household items seem to have about the same value that you might get at a yard sale, maybe a little more (lamp: $4-12; books: $.75-1.50; chair: $5-15).

There is a much more detailed document titled “Determining the Value of Donated Property” on the IRS web site at which covers multitudes of types of donated items. It also warns that there can be a 20-40% penalty if it is discovered that you overstated the value of a donated item. The IRS document on Charitable Contributions details what types of organizations and donations qualify for deductions.

The advantage to a yard sale is that you can get the cash immediately for your items. But if you don’t need the money immediately, you might make out better donating the items and claiming the deductions. Both efforts take time: the yard sale takes time to price things, advertise, and spend a morning actually selling and then packing up what’s left over. Donating to charitable organizations takes time to make lists and assign values and haul your stuff to the donation site (although some charities will pick up items) and then keep up with the paperwork until tax time. It just depends on which method you find less frustrating and confusing.

Of course, if you have things you need to get rid of and you don’t itemize your deductions and don’t want to have a yard sale, you can just take them to a donation site and drop them off without dealing with itemizing or receipts. Or you can donate them to a charity that is holding a yard sale. Some things might do well on eBay, but to list things item by item would be a bit tedious if you have a lot, and I don’t know that common everyday household items would do well. Some items, particularly children’s clothes and women’s clothes, might do well at a consignment store. Mrs. Wilt had a great post about that this week.

See Rocks In My Dryer to find more great tips or share your own with us.

7 thoughts on “Works-For-Me Wednesday: Claiming donated items on tax returns

  1. I’d like to add Freecycle to the list of ideas for getting rid of stuff — especially if you don’t want to haul anything anywhere. You just list what you have and someone will email and make arrangements to come pick it up. You can also get free stuff this way.

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  3. I think I would photograph anything that might be questionable. Everyday clothes and such probably wouldn’t be questioned if the prices are within the guidelines, but for a bigger ticket item it might be good to have proof of its condition.

  4. Great tips to share! My husband and I have used It’s deductible in recent years to track our donations. They give you lots of items and you fill in how many items and their condition and then you can print a summary. If you use Turbo Tax (which we don’t) you can input it right into your tax forms. Either way, it has been a helpful place to pool our donations and track them. It used to cost money, but I think it may be free now if you just sign up for an account with them:

    https://login.intuit.com/j/qbn/auth/user/login/

    As you said, it is still work, but I like that it goes to a good cause (I send some to our Crisis Pregnancy Center and some to Goodwill), I don’t have to haggle with people over prices, spend a weekend overseeing a garage sale, and it’s all out of my house and done with. I do take pictures of the stuff that we bring (not individually, just the piles/boxes/bags of stuff) to stick in the file with the taxes just in case there is ever a question. We have saved a lot of tax dollars in the last few years of doing this.

    Thanks for your helpful post. I was not aware of those other sites before either.

    Thank you,
    Erin

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  6. You know it’s posts like this that can certainly spur people on to grasp about this. I found it to be pretty informative. I will be coming back here for more reading as I really enjoyed this!

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