How much can you claim on taxes for goodwill donations

Goodwill-Easter Seals Minnesota provides a Donations Receipt as record of your donations for tax-related purposes.

IRS Guidelines
If you itemize deductions on your federal tax return, you may be entitled to claim a charitable deduction for your Goodwill donations. According to the Internal Revenue Service (IRS), a taxpayer can deduct the fair market value of clothing, household goods, used furniture, shoes, books and so forth. Fair market value is the price a willing buyer would pay for them. Value usually depends on the condition of the item.

Determining the Value of Donated Property
Defines "fair market value" and helps donors and appraisers determine the value of property given to qualified organizations. It also explains what kind of information you must have to support the charitable contribution deduction you claim on your return. See Publication 561 - https://www.irs.gov/pub/irs-pdf/p561.pdf.

To help determine the fair market value of your donations, you should consult with a local tax-preparation service or certified public accountant. Additionally, there are several online tools and services available provided by various companies and organizations. Here is an example of a video and link to TurboTax: https://turbotax.intuit.com/tax-tools/tax-tips/Taxes-101/Video--How-to-Estimate-the-Value-of-Clothing-for-IRS-Deductions/INF13870.html

Charitable Contributions
Explains which organizations are qualified to receive deductible charitable contributions, the types of contributions you can deduct, how much you can deduct, what records to keep, and how to report charitable contributions. See Publication 526 - https://www.irs.gov/pub/irs-pdf/p526.pdf.

IRS Links for Forms and Instructions — IRS Tax Forms

NOTE: It is a donor's responsibility to assign values to donations. Values should be based on secondhand market values, and not what the items cost when they were originally purchased. For more information, please visit irs.gov, specifically Publication 526.

Goodwill-Easter Seals Minnesota is a 501(c)(3) non-profit organization and has a Federal Tax ID: 41-0706171.

This Giving Tuesday, don't forget to keep track of your donation receipts.

That's because individuals can write off up to $300 in cash donations, and up to $600 for married couples filing jointly, made to qualifying charities in 2021, regardless of if they take the standard deduction or itemize their taxes. Typically, only those that do the latter can write off donations, but Covid-era laws changed that for 2020 and 2021.

The tax change alone isn't a reason to give more this year, but it is good news for the estimated 90% of households that take the standard deduction each year.

However, for donations to count as a tax deduction, there are a few requirements.

First, they must be made to eligible organizations. You can use this tool on the IRS's website to quickly see if the organization you want to donate to qualifies. That said, not every qualifying organization is listed there. You can also look on many organizations' websites for a determination letter from the IRS.

Keep in mind that donations made to individuals are not tax-deductible. So if you gave to a GoFundMe campaign that wasn't linked to a charity, it likely does not qualify (that's no reason not to give, of course).

Second, the donations must be made in cash (including by check, credit card or debit card), and you'll need the receipts. Volunteering, or donating household items or other property does not count.

Let's say a married couple with an effective tax rate of 25% jointly donated $750 throughout the year. If they take the standard deduction, they'd be able to deduct the full $600, lowering their federal tax liability by $150.

There's one other important change to individual charitable giving this year. Those who itemize typically can write offup to 60% of their adjusted gross income for qualifying cash contributions. This year, they can write off 100%.

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Deducting Your Donation

• Only taxpayers who itemize (use the long form) can deduct charitable donations. 
• Save all of your paperwork.
• Always consult a tax accountant if you have questions about your claim.

Retail Donations

• For donated items worth less than $500, you are expected to provide the "fair market value" of the items when filing your tax return.  The "fair market value" of a donated item can vary greatly.  If you bought a new shirt for $40 a decade ago, then donated it to a charity that resold it for $3.99, then its "fair market value" is $3.99, not $40. Visit Goodwill Industries International's valuation guide for estimated values of commonly donated items.
• When filling out your donation receipt, please try to include as much information as possible about the type and quantity of your donated items. Trying to claim $400 for "one bag of clothes" is a red flag to auditors.
• If you believe your donation is worth more than $500, you must submit an IRS Form 8283 with your tax filing.  The IRS will also require a professional appraisal for these items. The cost of the appraisal may also be deductible as a miscellaneous expense.