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Tax deductions: What is your clothing donation valued at?

Published 3/14/08 (Modified 6/17/11)
By MoneyBlueBook

When I was little I always wondered why my parents bothered to rummage through our closets, cabinets, shoe racks, and sock drawers for assorted clothing every few years. I would see my mom folding and stacking old and outdated clothes that I never wore anymore into black garbage bags and deliver them to the Salvation Army or Goodwill. It wasn't until I started working and earning income that I finally realized why it made sense to take the time to compile old apparel and send them to local charities. Other than the usual altruistic factors, the biggest reason is to take full advantage of the IRS itemized charitable tax deduction for qualified clothing donations.

Not that we all shouldn't be donating to charities out of the kindness of our hearts, but Uncle Sam has provided us an attractive incentive in the form of tax breaks for charitable contributions. Most people are keenly aware that they get a tax deductible write off when they tithe or donate money to a charitable organization like their local church. But some seem to forget that the deduction also applies to noncash donations like clothing, shoes, and furniture, so long as they are in reasonably good condition. Of course, like with all good perks there are ground rules in place to prevent abusive taxpayers from going crazy and taking unfair liberty with the charitable deduction. Without these regulations, you would probably have people assigning all sorts of outrageous valuations on the items they donate ($25 for a used T-shirt complete with holes, for example).

The Charitable Tax Deduction Is Useful Only If You Itemize

The calculation of one's annual tax return usually entails adding up all the income and gains for the year, and then deducting expenses and losses to come up with the final taxable income balance. The IRS provides two primary deduction methods - the simpler standard deduction, which is a flat set amount, and the itemized method, which requires the taxpayer to manually report each individual deduction that he or she qualifies for. The charitable deduction is one of many that falls in the itemized category. The taxpayer has to choose whether to take the standard deduction or to itemize. However, until the total sum of all itemized deductions exceed the standard, it doesn't make sense to itemize. Unless you already carry a hefty home mortgage with itemizable mortgage interest, it probably makes more sense to itemize every other year, and bulk up your donations in those years. When you itemize, charitable contributions should be a key part of your tax reduction plan.

Five Steps To Donating Your Clothes And Getting That Tax Deduction, Without Being Audited

When donating clothes for the tax deduction, the worst thing you can do is to drastically overestimate the donated clothing value and trigger an alarm bell. Triggering a red flag will send the IRS man running to your home to request receipts and proof of your donation. Because charitable donation is one of those tax items frequently abused by taxpayers, the IRS closely scrutinizes such claims. Thus you want to make sure you go by the book:

1) Gather All Your Unwanted Clothes and Organize Them - Most usable articles of clothing, including shirts, jackets, coats, shoes, dresses, socks, neckties, suits, and even underwear may be donated to local thrift shops and charitable institutions. For underwear and socks however, it's important to be aware that the IRS now requires all articles of donated used clothing to be in good used condition or better. It's probably a better idea to avoid worn socks and underwear. While it's true what they say - that beggars can't be choosers, we should still try to respect the dignity of those individuals receiving them. If you want to donate those particular items, I suggest buying a new cheap pair for donation.

2) Make A Detailed Record Of Your Donated Items - While it is likely no questions of your donation will ever arise, it is still important to keep a detailed list of your donation in case questions arise or you get audited on the matter. Try to keep a spreadsheet chart or list of all articles donated, recording information such as the number of clothing articles, the estimated dates of purchase, condition at the time of donation, the assessed fair market value of each item, and perhaps even substantiation of how you calculated and arrived at the particular valuation. Some people also recommend taking digital photographs of each item. I recommend taking photos, especially for those items whose valuation may be a bit high and out of the norm.

3) Assign An Appropriate Fair Market Value For Each Clothing Item - The donation valuation process is generally subjective and you are responsible for assigning the proper value for your charitable donations. There is no exact IRS formula or chart as the agency relies on subjective approximations. However, if you wish to donate more than a total of $500 worth of clothing or other goods to charities, you must complete Section A of Form 8283 Non Cash Charitable Contributions, and include it with your federal tax return. A formal donation appraisal by a qualified appraiser is not needed unless you are making a contribution of non-cash property worth more than $5,000. A qualified appraiser is someone authorized to complete Part III, Declaration of Appraiser, of Section B, which must also be included with the tax return in that event.

The IRS permits taxpayers to only deduct the fair market value of the donated clothing and household good. Fair market value is the reasonable price that an ordinary buyer would pay for the item in a regular market situation such as at a flea market, on eBay, or at a thrift shop. Fair market value is not the original purchase cost but the second hand used price that could be obtained in an otherwise efficient market.

There are various used clothing charts and valuation tables on the internet to help determine worth. Both The Salvation Army and Goodwill Industries provide assorted valuation guides on their web sites, which may be used as templates for approximating fair market value. You should keep in mind that the donated value is frequently much less than the original purchase price. If you want additional clarification, please take at look at the official IRS publications on the subject:

  • Publication 561, Determining the Value of Donated Property - Useful if you want to examine a few valuation scenarios.
  • Publication 526, Charitable Contributions - Addresses the entire subject of charitable donations and provides a useful background.

4) Deliver Your Donated Clothing To The Charity - Most people donate clothing and other household products through charitable organizations such as their local church, or through Goodwill and the Salvation Army. I recommend visiting their websites to locate one of their many thrift shop locations nationwide where you can bring your bags of donated clothing to. There is no need to make a reservation or appointment. Just deliver your bags of clothing and your categorized list of items. Be sure you have properly compiled your list of donation items before bringing the items to the site. Don't expect the charity to sort the items and do the work for you on the spot.

Usually, the way it works is you drop off your items at the donation site and a staff member provides you with a receipt upon request. Although you are not obligated to obtain a written receipt from the charity if the total value of the donated clothing is under $250, you should still always request one for record keeping purposes. Sometimes, but not always, they'll make a note on the receipt for you about exactly what was dropped off, but the description is usually very general - such as "3 bags of clothing". Other times, they will simply hand you a blank receipt for you to fill out.

Some charitable thrift shop centers allow you to mail your clothing donations in, or even provide large clothing donation boxes where you can leave your clothes. Just be sure to include a self-addressed, stamped envelope so the center can send you a receipt later. Shipping costs are tax deductible as well.

5) Claim the Value Of Your Clothing Donation As A Charitable Deduction On Your Tax Return - Since you went through all the trouble of donating your used clothing, be sure to take the appropriate deduction on your tax return when you file. To claim the charitable tax deduction, you will need to report the value of your donated clothes on Schedule A of Form 1040 as an itemized deduction. The total value of your charitable deductions cannot be more than 50 percent of your adjusted gross income in any single year. However, donations exceeding the 50 percent limit can be carried forward to future years.

As with most things in life, I recommend that you plan ahead before making large clothing donations. If you don't usually carry significant itemizable expenses such as home mortgage interest and taxes, you should save up your donations until you have a sizable amount before making the contribution. While charitable giving is always a worthy cause, it doesn't mean you shouldn't try to fully maximize the tax advantages the government provides.


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55 Responses to “Tax Deductions | Clothing Donation Value | Money Blue Book” 

  1. Mimoji says:

    How much would you actually get back from doing this? Seems like it's more work than benefit (financially, I mean).

  2. Raymond says:

    Mimoji,

    That's why unless you have a huge household with a sizable continuous supply of old clothes, you probably should just accumulate and donate every 1-3 years.

    But sometimes, when people make a big move or perhaps move to a nursing home for example, there is often a significant amount of unused belongings left behind (a lifetime worth of accumulation). The more expensive unwanted items can be sold on eBay, with the rest donated to charity.

  3. BudgetPretty says:

    Thank you for the detailed article. I have been searching for a detailed post on how to go about doing this. I always asked myself how I could protect myself in an audit if the charity gives you a receipt as vague as "3 bags of stuff". I do not own a home yet, but I do have education/college expenses and student loan interest I write off. I never requested receipts and finally thought about doing that since my income increased a lot since last year. Can I still benefit from the Charitable Tax Deduction? I do have a lot to donate.

  4. Laura says:

    I am starting to understand the Charitable Tax Deduction (this will be a first for us), but I have another question - can I donate toys and kitchen items (such as pans, plates, cups, etc.) and write them off too? We recently moved and downsized. The Salvation Army site was an excellent site as it gave estimated prices for the obvious items (such as clothing, sheets, etc.) but mentioned nothing about toys and kitchen items.

  5. Debi says:

    Laura:

    The Goodwill website lists many household and miscellaneous items that the Salvation Army site does not. You should be able to find what you need there.

  6. Bob says:

    To get an idea and help organize donations, you can use a tax website service such as turbotax.com. You don't have to submit your taxes through there, but they will let you register and go through the entire process without having paid or submitted. Turbotax actually has a well organized page for donations and it calculates a reasonable cost for each item for you. Useful if you don't know how much to claim.

  7. Beth Washinger says:

    Why is it necessary to take pictures of clothing? It seems like it's not worth the effort and a yard sale would be better to get them out of the house. I'd love to donate to charities, but taking pix takes me a lot longer. Thanks!

  8. Sandy Pedersen says:

    Thanks for the overview, I also went to the Salvation Army site and Bankrate.com and printed their estimate lists. If you ordinarily itemize deductions anyway, it makes sense to get the stuff out of the house as often as you can get a batch together, as long as the dropoff point is convenient. Why clutter your closet any longer than you have to? Isn't that really the point of cleaning it out? My experience with pictures and yard sales has been by far the opposite of Beth's. Lining things up for a picture takes no longer than lining them up for a yard sale, and you don't even need to put on price tags. A quick click with the camera and you're done. And the time and effort that goes into a yard sale is something I absolutely don't have. Back to the small batches - yard sales are most successful if you have tons of stuff to attract customers. We piled stuff up for 10 years planning to have a yard sale "someday" - by then most of the clothes were out of style. We finally donated everything to a local youth group that was having a HUGE rummage sale (they made over $8000 in one day). Many of the things needed to at least have the dust shaken/wiped off (extra work). It felt SO good just to get it out of the storage area.

  9. Mary says:

    I have a question. At the beginning of the year I donated about five bags of clothes. I did not get a picture of any of it. Is there a way that I can still use them on my tax refund.

  10. Vince says:

    Please, do not delete the given message. Money obtained from spam will go to the help hungry to children Uganda

  11. Neille Russell says:

    Does anyone have a list of approximate values for used clothing given to charitable organizations? My husband recently died, and I have given much of his clothing to The Salvation Army.

  12. Marielyn says:

    Man ,I know it may sound bad or should I say selfish the thing is that I just donated 6 big trash bags of mostly new brand name clothes and a big box of other items, and I'm just reading this and I feel like I'm not going to get alot back for what I just donated because I have no written paper or pictures of all the expensive clothes and other good clothes I donated yesturday the only thing I have is the recipet that says I donated 6 big trash bags of clothes and 1 big box. S what do you think about this? youur honest opinion?

  13. Marielyn says:

    Please someone that knows what do you think?

  14. Jan Roberg says:

    Marielyn,
    You asked for advice about your charitable donation. I'm an enrolled agent, which means that when people are audited by the IRS, I'm licensed to represent them. I've actually represented people who were being audited for their charitable donations so I'm pretty familiar with what the IRS is looking for.
    First, you said that you didn't have pictures. That's okay. Pictures are great, and helpful if you're donating expensive items like exercise equipment or furniture, but most people don't have pictures of their clothing donations.
    You said you had no written paper of the clothes you donated. This you will need, but you can do that yourself. I realize that you've already donated the bags, you might have already forgotten a few things, but the sooner you sit down and think it through, the better your memory will be. Six trash bags hold a lot of clothing. Relax and think it through, what did you give away? The killer red dress that just doesn't fit anymore? The favorite jeans that are now too short? The clothes you loved will be easier to remember, list those first. Sometimes the clothes you hate are easy to remember too, like the holiday sweater from Great Aunt Edna that you had to wear whenever she visited. Write it all down, don't think about values yet, just try to make the list first.
    After you've listed the memorable items, then you have the non-descript items. For me that's usually t-shirts. There always seems to be an assortment of t-shirts in every clothing donation I make. I have a friend who always seems to give away a stack of jeans. You'll list those items as X number of t-shirts, X number of jeans, X pairs of socks, etc. These are the clothes that aren't particularly special, but they're still worthy of donating.
    Once you've compiled your list (to the best of your ability) then you can assign values to what you've donated. The Salvation Army is a good source and they have a link from this web-site. The pricing guides give you a value range like $2 - $15 for one item and 50 cents to $3 for another. Think about the quality and condition of the item you donated. A designer label suit from Nordstrom's in excellent condition will be valued at the top price of it's category. A good condition, store-label suit from Walmart will be down at the bottom. If your clothing items cannot be considered to be in at least "good" condition, you cannot claim a deduction for them. As a general rule, your special items are more likely to be in the pricier categories and your bulk items are more likely to be in the lower categories. Be realistic about the values you assign to your donations. If you stick within these guidelines you should be okay.

  15. Doug says:

    Another resource to find the value of donations is CharityDeductions.com. It is a membership website (less than $20/year) but it takes the pain out of the process. It's like ItsDeductible but without the TurboTax part.

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