Jean's Blog
You Get What You Give
Posted by Sarah
This morning on Today’s Tax Hotline the phones were ringing off the hook with calls from people asking Jean and the other Enrolled Agents their last-minute tax questions. I was chatting with Jean after the segment and she said that lots of people called wondering how to figure out how much to deduct for donations they’ve made to places such as Goodwill or the Salvation Army.
While I like to get good deals at thrift stores, I also like to give back every once in a while too by making a donation. Gaining some extra closet space doesn’t hurt either…Crocs, gladiator sandals…what was I thinking? Luckily, there are resources out there to help determine how much you can deduct from your taxes after you make a donation.
According to the IRS, you can deduct the “fair market value” of donated clothing and household goods. The fair market value is how much the item you’re donating would go for if it were to be sold in today’s market.
The easiest way to determine the fair market value of your item is to take a look at valuation guides on the Salvation Army or Goodwill websites. You can also use TurboTax’s free online program called ItsDeductible to keep track of your donations throughout the year and get an idea of what your donations are worth.
One last thing…when you go to make the donation, ask for a receipt and make sure you hold onto it. You won’t get the value of the donation listed on the receipt but at least you’ll be able to prove that you made one.
What’s the best donation from your closet that you’ve ever made? We’d love to hear about it!
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Thank you for the info on where to find IRS values for donated items! I’ve always shied away from taking deductions for donated articles because I thought my guess at their value would red flag my return. Am delighted to now take these deductions!
I think my favorite donations were 2 business suits, both of which I had replaced buttons to make it look, well, less fun. To my surprise, a few weeks later, a young woman came in to interview, wearing one of the suits…I recognized the buttons….She wore the 2nd suit to her second interview. And yes, she got the job…
I once donated a few pairs of jeans, a Hawaii-style shirt, and sunglasses! Needless to say, I did not do a good job of deductions this past year on my tax return and did account for these items! This blog has helped me realize how to have more accountability using programs like TurboTax and holding onto receipts! Thanks Sarah and thanks Jean for this website!
It’s funny — I often donate things, and I never deduct for it. Partly it’s that it feels money-grubbing to ask for a receipt from a charity, especially when I’m relieved to have the stuff out of my closet. I know, I know — that’s the kind of “mental accounting” that costs me money and doesn’t help anyone else. Sigh. From now on, I’m getting receipts…
I never remember to deduct either. Haven’t done my taxes, yet, so there’s still time! Thank for the info!