When you purchase through links on our site, we may earn a commission. Here’s how it works.
In our house, we donate all of our unused clothes, shoes, and household items to Goodwill. The items are still in good shape. We just don’t find ourselves in need of them anymore, which is why it’s nice to give them a second life. Donating to Goodwill is also a tax deduction, so those who donate also get a “reward” for their goodwill. In this article, we’ll discuss the tax benefits of giving, not to mention how important donating is whether you benefit from it or not.
Charitable Donation Value Guide
Possibly the most difficult part about giving a donation is determining its value. This is simple if you are just writing a check to an organization of your choosing, but if you’re donating items, it can be a little more difficult. In regard to Goodwill donations, the IRS allows taxpayers to deduct the fair market value of their donations.
Fair market value is the price a buyer would pay for the items. This is an amount that you must come up with yourself. Goodwill does not tell you the value of your donations. To determine the fair market value, you’ll want to take into consideration the condition of the item and what the items will sell for.
For example, if Goodwill sells t-shirts for $4 and you donated 20 t-shirts you could put the fair market value at $80. Below are some items and their Goodwill value guide. (Remember to take into consideration the style of clothing too (e.g. a wedding dress would most likely be valued higher than a sun dress.)
- Women’s Clothing
- Blouse $4-$9
- Pants $4-$23
- Dress $6-$28
- Men’s Clothing
- Shirt $4-$6
- Shoes $3-$30
- Jacket $10-$45
- Children’s Clothing
- Shirt, pants, sweater $2-$10
- Shoes $3-$10
- Boots $6-$10
What Donations Are Tax Deductible?
Donating to a charitable organization is great because some would say it’s more important to give than to receive. However, you can also get a financial break (i.e., tax write-off) by keeping records of your charitable donations.
Donations equaling $250 or more require a bank record, payroll deduction records, or written acknowledgment from the organization. If the donation is less than $250, a receipt from the organization with the date, amount, and organization name on it is sufficient.
Below are some examples of donations that are and aren’t tax deductible.
|NOT Tax Deductible
|Giving to churches, synagogues, temples, mosques, and other religious organizations
|Contributions made to political organizations and candidates
|Donations to nonprofit schools and hospitals
|Gifts donated to individuals
|Contributions to public parks and recreational facilities
|Contributions to labor unions, business associations or chambers of commerce
|Salvation Army, Red Cross, Goodwill, Boy, and Girl Scouts, etc.
|Contributions to for-profit hospitals and schools
|Contributions to foreign governments
|Non-profit or organization membership dues
This video below has some good tips for how to get the most out of your charitable donations.
Calculate Your Year-End Tax Deduction
At the end of the tax year, you should total up your charitable donations to maximize your tax write-off. For example, say you contributed the following in one year:
- $300 worth of clothes to Goodwill
- $5,000 to a religious organization
- $100 to a political candidate
- $50 to a family member for their birthday
- $25 to participate in the recreational basketball league
- Used couch to nonprofit school for teacher’s lounge valued at $300
You could write off $5,600 (Goodwill, religious tithing, and couch donations) on your taxes. You cannot write off your contributions to the political candidate, your family member’s birthday, or your participation in recreational basketball because those are not tax deductible. Did the basketball surprise you? It is not tax deductible because you are receiving something in return for your payment — you are paying to participate in the basketball league.
What Are The Best (And The Worst) Charities To Donate To?
Looking to get a charity tax deduction? How do you know the best and worst charities to donate to? It’s not so much which are the best causes (as that could be highly debatable and subjective), but rather what’s the best use of your hard-earned money and return on your dollar?
Is your money going to have a large impact and make a difference in the cause, or will it go to waste on expensive overhead or unnecessary spending? We’ll share with you a little more about charitable donations tax deductions and our top picks for the best charities to give to (as well as those not to give to) charities donation guide.Tagged With: