Tax Tip Thursday – Week 3

January 29, 2009

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As an organizer, I am regularly recommending that folks donate unwanted goods to charity.  Not only will it help clear the clutter and  help those in need but they can also get a tax receipt.  This week’s Tax Tip Thursday is dedicated to information on just that!  You give…You get.

When donating goods to charity, make sure the items are something that someone else would want.  They need to be in good working order.  Charities spend tens if not hundreds of thousands of dollars each year on trash disposal — items people donated that are really trash.  So if you really want to help a charity, be selective on what you donate.

The good rule of thumb for donating goods is to keep detailed record in case of an audit.  I suggest (and do for my clients) the following:

  • Document what is donated
  • Take photo of the items donated
  • Donate to an organization that is an official tax exempt charity
  • Retain a tax receipt from the charity

How do you “value” what has been donated?  There are many sources that give you fair market value.  This is a start, but then it is best to consult with your tax professional.

  • IRS info on donating goods (IRS)
  • Workbook – “Money for Your Used Clothing” (Workbook)
  • Bankrate.com valuation worksheet (Worksheet)

If you didn’t keep good records in the past, now is a great time to start.  It is easy, and worth it to all.  You benefit and so do many needy charities.

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And now a word from my lawyer….you should consult your tax professional or irs.gov for any rules and/or tax laws. Atmosphere does not represent itself as a tax professional.

One Response to “Tax Tip Thursday – Week 3”


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