Donating household items to a charity is doubly good. On the one hand, your donations benefits others, those that get help from the charities and those who are able to buy the things they need and want for a low price. On the other hand, you can get a tax benefit for anything that you donate, saving you money in the process of blessing others.
In order to get the maximum benefit from your donations, there are a few things that you need to know.
Get a Receipt Every Time
In order to claim your deductions for charitable contributions, you need to have proof that you made the donations in the first place. Make sure to request a receipt each time you drop off items. Most charities won’t give you one automatically.
Put your receipts in a safe place and organize them by month, so you can match them up with your own detailed item list. This gets us to the next tip.
Itemize Your Items
It isn’t enough just to have receipts from your donations. You must also have a list of what those donations were and how much they are worth. Charities won’t do this for you. It is up to you to keep a record.
One of the easiest ways to do this is to record items and their donated value in a notebook. You want to be as detailed as possible. Record “Five women’s sweaters and two pairs of dress pants” not “One bag of clothing.” The IRS wants to see detail. This advice comes straight from my accountant.
Record the Highest Value
Many people underestimate what their contributions are worth to a charity. Some people overestimate, but that is another issue. A suit in good condition can be worth as much as $150, for example. To get accurate values, search online or visit a charity that resells items to get an idea of what your donations may be worth.
There are special value rules for certain items. For example, you can generally claim a higher value for a donated car that is used by a charity than one that is sold by a charity to raise funds.