Donating to a local charity is great for the charity and great for you. Your charitable contribution is a tax deduction. The summer months are usually a time when families start to clean out those closets and make way for new school clothes and shoes. As we get into fall, we will also start to make way for warmer clothing and shoes. So the big question is, what to do with all those bags of used clothing and house hold items. Not everyone has the time and energy to have a garage sale. The IRS allows individuals to deduct charitable contributions made to a qualified domestic charity organization. Did you know that the summer months tend to be the slowest months for charities when it comes to donations? That’s because those are the months that families spend the most time on vacation or out of town. This is when charities need donations the most. You will need to list the items you have donated on your tax return on form 8283 if your donation is over $500. You would be surprised at how quickly the value of your items add up. Take a look at the Fair Market Value sheet attached. This will give you a good idea of what a few bags of donated items are really worth. This is a great tax break for you and helps charitable organizations provide certain social welfare needs of the community.
Here is a list of helpful hints that will help you earn this deduction of those donated items:
- Take a picture of large ticket items such as furniture, electronics, and yard equipment.
- Use the Fair Market Value list to determine the value of your items.
- Document a list of items donated and keep in your file folder with other tax documents.
- Obtain a receipt from your local charitable organization with the FMV of items donated.
- Make sure your receipt is dated with the current year of your donation.
- You do not need to list each individual items such as each pair of children’s shoes. Items can be combined for one FMV amount such as “Children’s Shoes: $24”. This assumes you had 12 pairs at $2 or 8 pairs at $3 and so one.
Unfortunately, donations made to needy individuals do not count toward a deduction. Remember, the donation must be made to a qualifying Non-Profit organization.