Every year, thousands of dollars of potential tax write-offs are unused. One of the most common areas that people ignore or forget is the donation of property.
This is typically in the form of clothing, shoes, furniture, or other household items.
So, let's see what the route issues are why people do not utilize this write-off.
1. What information would be needed to take the write-off?
You should have a listing of the items that you donated, the date donated, and the value of the items that were donated.
2. How do I determine the value of the items donated?
A great resource of estimated values for typical items donated is provided by the Salvation Army. Click on the link to the left and you will see that it gives a dollar range for numerous items.
3. How do I obtain proof that I donated these items?
Simply list the items donated, bring the items to Goodwill or Salvation Army, and have them stamp your listing.
4. What if I use one of those clothing donation boxes? There's not anyone there that will stamp a form!
If the value of the donation is less than $250, and it is impractical to get a receipt, then just keep a
record of what was donated, the date, and the name of the charitable organization.
NOTE: Not all drop boxes are the same. Some aren't even charitable organizations! Be sure to look at the label on the drop box and, if uncertain whether it is a charitable organization, Google the information you found. There are some drop boxes that might say "for the needy" and then sell the clothing in other parts of the world, for profit!
5. What is required for input on the tax return?
It depends on the dollar amount in total that you donated. If you donated in total less than $500, just the dollar amount will be entered. If over $500 in total, you will need to fill out a form 8283. On this form, you will simply input this information:
Date donated
Organization to whom donated (including their address)
Description of items donated
Date purchased (this is typically "various")
Value of items donated (see #2 above!)
6. Can I donate anything?
The items you donate must be in GOOD condition or better. Sorry, you cannot get a deduction for the t-shirt you've worm since high school that has tons of rips, stains, and no value whatsoever to anyone other than you.
7. What if I have more questions?
Send me an email! mwloomiscpa@gmail.com