Cap on clothing donations to Goodwill?

[Mrs. Dinero]

We have used $500 for the last 4 years.  Our actual donations have been well over that.  We average 2 to 3 drop offs a year with 8 or so bags of clothing each time.  Each bag is definitely valued at over $50 even with the most conservative estimate.

Other charities we donate to:
-Our church
-United way
-Our state's university foundation

Those are easy.  There is a concrete # for those.  What should we use for Goodwill?

[The Captain]

I'm OCD so take my advice with a grain of salt.  I keep a pretty detailed inventory of the donated items and print out sold auctions from EBAY to use as comps. 

[Mrs. Dinero]

I understand the need to keep good records for a possible audit.  Do you claim more than $500?

[The Captain]

Frequently.  For example one year DH lost a lot of weight and needed a full wardrobe replacement.  There were 5 or 6 like new men's business suites, several sport jackets, numerous pairs of dockers, sweaters etc..  We also donated a used washer and dryer that year and about 100 or so (yes, I read a LOT) books to the library. 

We frequently donate to food drives and do special grocery runs just for that purpose.  I keep the grocery receipt and usually staple it to the thank you card or letter we get from the organization sponsoring the drive.

Same with school supplies, winter coat, giving tree drives during the year.  I can't say I've ever been audited but I will say my records are in better order than most I know. 

[Deleted]

Goodwill publishes a valuation guide for donors that I use when donating used items to Goodwill, Salvation Army, etc.  I prepare an itemized list with assigned values and staple it to the receipt. Yes, in any one year we contribute more than $500. The IRS code requires significantly more documentation (appraisals, etc.) if ANY ONE ITEM is valued at more than $500 but they don't freak out if your total donations are in excess of $500 as long as you have documentation. 

Captain, I know exactly what you mean.  My DH's 25 lb. weight loss has been Salvation Army's delight over the last six months. And I treat food donations the same way you do.  

www.goodwill.org/wp-content/uploads/2010/12/Donation_Valuation_Guide.pdf

[justme]

You have to itemize to get the donation deduction, right?

[Opti]

Mrs. D, I don't know if this was the question from your thread title, but
I remember one of the organizations I used to donate to kind of did a cap
on donations especially clothing because I think IRS rules used to say or
imply that if it was a certain monetary value overall, the organization was
supposed to go through and detail & value everything you donated. Have no
idea whether that is true or not now as this was at least 10 years ago
when I regularly donated to that organization. (I haven't lived near them for
quite a few years.)


I used to try to list what I donated, but unless you itemize it becomes
unnecessary.

[grits]

This reminds me that I need to print out my tax forms.

[mwcpa]

"I understand the need to keep good records for a possible audit"

you understand correctly.

"You have to itemize to get the donation deduction, right?"

yes

"We average 2 to 3 drop offs a year with 8 or so bags of clothing each time. Each bag is definitely valued at over $50 even with the most conservative estimate"

You are required to maintain a detailed list of what is included in the bag... saying a bag of clothes is not adequate... saying 4 pairs of pants in good condition, 4 shirts in near new condition, etc. is.

Items that are given away are required to be in "good" or better condition.

More information can be found at the IRS website.

www.irs.gov/taxtopics/tc506.html

www.irs.gov/publications/p526/index.html

[TheOtherMe]

One of my former bosses advised clients who donated a lot of items in good or better condition to places like Goodwill to take pictures of every item, whether it be in a group or alone.  He said that was your only proof of what you gave when you said 5 bags.  5 bags means nothing in an audit situation.  

Goodwill here just gives a receipt with the date stamped on it.  Nothing more.  You fill out the rest.

[taxref]

I like to advise families with children to give the kids a task relating to this.  Have the children make a list of each item put into the donation bag.  Mark the list with the date donated, and the organization.

Charities also have a list of thrift shop values for many items.  If the children are skilled enough in math, have them enter the values and add them up on the list.

[mwcpa]

good idea ref.... it will teach them a little bit about personal finance too, a skill many lack....

[Deleted]

Feb 3, 2014 19:02:02 GMT -5 taxref said:

I like to advise families with children to give the kids a task relating to this.  Have the children make a list of each item put into the donation bag.  Mark the list with the date donated, and the organization.

Charities also have a list of thrift shop values for many items.  If the children are skilled enough in math, have them enter the values and add them up on the list.

or you could just use 'it's deductible' in turbo tax and let them do the math for you

[taxref]

"good idea ref.... it will teach them a little bit about personal finance too, a skill many lack...."


Thank you, MWCPA.  On a non-tax note, this kind of task also serves another purpose.  When I used to give out these kinds of jobs to children, I would point out that doing the work involved putting what they learned in school to use.  Such real life applications of what they learn in school, seems to help children's attitudes toward school work.