Can I Deduct Clothing Donations to Charity?

Can I donate clothing to the Salvation Army and take a tax deduction?'

I had heard that the IRS had gotten tougher on clothing donations as deductions.

What things should I consider so that I don't have any problems with the IRS?

If you itemize your deductions on Schedule A rather than taking the Standard Deduction then yes you can claim a deduction for Clothing donations. Keep in mind that you need to make a list of the donated items, and get a receipt from the organization. The IRS publication 526 states that the clothing must be in Good usable condition.
http://www.irs.gov/publications/p526/index.html

It depends upon the amount that you are trying to claim. If the amount of the donation is over $200, then you will need to be able to verify what you donated and the amount of each item. You will also need for the charity organization to be willing to give you a letter stating what you donated and the approximate worth of your donation. Most organizations will do this automatically. Some you will have to ask.

"Can I donate clothing to the Salvation Army and take a tax deduction?"

Yes. You may.

I had heard that the IRS had gotten tougher on clothing donations as deductions.

There are some guide line you would need to follow:

According to publication 561

Used clothing and other personal items are usually worth far less than the price you paid for them. Valuation of items of clothing does not lend itself to fixed formulas or methods.

The price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops, is an indication of the value.

(WARNING)You cannot take a deduction for clothing donated after August 17, 2006, unless it is in good used condition or better. An item of clothing that is not in good used condition or better for which you take a deduction of more than $500 requires a qualified appraisal.

http://www.irs.gov/pub/irs-pdf/p561.pdf

Noncash Contributions
For a contribution not made in cash, the records you must keep depend on whether your deduction for the contribution is:

Less than $250,

At least $250 but not more than $500,

Over $500 but not more than $5,000, or

Over $5,000.

Amount of deduction. In figuring whether your deduction is $500 or more, combine your claimed deductions for all similar items of property donated to any charitable organization during the year.

If you got goods or services in return, as described earlier in Contributions From Which You Benefit, reduce your contribution by the value of those goods or services. If you figure your deduction by reducing the fair market value of the donated property by its appreciation, as described earlier in Giving Property That Has Increased in Value, your contribution is the reduced amount.

Deductions of Less Than $250
If you make any noncash contribution, you must get and keep a receipt from the charitable organization showing:

The name of the charitable organization,

The date and location of the charitable contribution, and

A reasonably detailed description of the property.

A letter or other written communication from the charitable organization acknowledging receipt of the contribution and containing the information in (1), (2), and (3) will serve as a receipt.

You are not required to have a receipt where it is impractical to get one (for example, if you leave property at a charity's unattended drop site).

Additional records. You must also keep reliable written records for each item of donated property. Your written records must include the following information.
The name and address of the organization to which you contributed.

The date and location of the contribution.

A description of the property in detail reasonable under the circumstances. For a security, keep the name of the issuer, the type of security, and whether it is regularly traded on a stock exchange or in an over-the-counter market.

The fair market value of the property at the time of the contribution and how you figured the fair market value. If it was determined by appraisal, you should also keep a copy of the signed appraisal.

The cost or other basis of the property if you must reduce its fair market value by appreciation. Your records should also include the amount of the reduction and how you figured it. If you choose the 50% limit instead of the special 30% limit on certain capital gain property (discussed under Capital gain property election, earlier), you must keep a record showing the years for which you made the choice, contributions for the current year to which the choice applies, and carryovers from preceding years to which the choice applies.

The amount you claim as a deduction for the tax year as a result of the contribution, if you contribute less than your entire interest in the property during the tax year. Your records must include the amount you claimed as a deduction in any earlier years for contributions of other interests in this property. They must also include the name and address of each organization to which you contributed the other interests, the place where any such tangible property is located or kept, and the name of any person in possession of the property, other than the organization to which you contributed.

The terms of any conditions attached to the gift of property.

Deductions of At Least $250 But Not More Than $500
If you claim a deduction of at least $250 but not more than $500 for a noncash charitable contribution, you must get and keep an acknowledgment of your contribution from the qualified organization. If you made more than one contribution of $250 or more, you must have either a separate acknowledgment for each or one acknowledgment that shows your total contributions.

The acknowledgment must contain the information in items (1) through (3) listed under Deductions of Less Than $250, earlier, and your written records must include the information listed in that discussion under Additional records.

The acknowledgment must also meet these tests.

It must be written.

It must include:

A description (but not necessarily the value) of any property you contributed,

Whether the qualified organization gave you any goods or services as a result of your contribution (other than certain token items and membership benefits), and

A description and good faith estimate of the value of any goods or services described in (b). If the only benefit you received was an intangible religious benefit (such as admission to a religious ceremony) that generally is not sold in a commercial transaction outside the donative context, the acknowledgment must say so and does not need to describe or estimate the value of the benefit.

You must get it on or before the earlier of:

The date you file your return for the year you make the contribution, or

The due date, including extensions, for filing the return.

http://www.irs.gov/pub/irs-pdf/p526.pdf

How to track them and value them (in case of audit)?

You may want to use one of our software DeductionPro

http://store.taxcut.com/dr/v2/ec_Main.Entry17c?SID=1478&SP=10023&CID=0&PID=860903&PN=1&V1=860903&CUR=840&DSP=&PGRP=0&ABCODE=&CACHE_ID=0

Or our competitor It's Deductible

http://turbotax.intuit.com/tax_products/learn_itsdeductible.jhtml

Yes if you get and keep your receipt from the charity.

Many people say well I'll put down 5 bags down that I gave to the Sally or I will put down 3 bags of toys etc and of course many do but of course many do not. Donations of course are limited to income a lot of times. You can probably even deduct as a contribution, your false teeth who knows if you gave it to a charitable organization. The key word is charitable that doesn't mean to some homeless person. It must be legitimate. Things you should most consider is one thing. If it sounds rediculous it probably is. Take a client of ours jointly he and spouse 250k, deucted 2500 in clothing. Not much for that amount. Another 10 bags and making 30k I dont' know about you but I would question that. They cost me this and that and that and my best fair makret value guesstimate is they cost me 5k. Okay why are you giving out new clothes you have a problem or something/ Okay so I'm joking. If it sounds rediculous it probably is. I have seen some wild ones in my time and no situation is ever going to be the same. Who is to say what will help you. Who is to say your income and such will allow it. Multiple factors and every situation differs. When it comes to taxes and there is something you need to see, IRS.GOV that's the place to be. But in answer yes of course you can donate clothes to the sally and hey if it is legit heck with it that's what I would put down. I don't want to flag them. For what is what I say. Truth is truth. That is the last part of your question, you consider that if you breat the law you got to go bye bye maybe. You can consider that if it sounds like it is not a very smart idea no matter what someone tells you you know what is right.

Dont' let it bother you. I have heard the IRS audits high income tax payers, I have heard they audit people who use mileage, I have heard they audit people who claim too much in food expenses or business meals, I have heard the IRS do everything in the book. Chances are quite good and this is very true. You act like a responsible citizen and you'll do just fine. Try to jerk with Revenue you may never get out of their radar. That is a true fact. I know clients today that wish they weren't there.

Visit us at bcbsinc.com. We have a lot of resources. But when it comes to what revenue wants and not and what they say is good and not good dont' take it from me, take it from IRS.GOV.

The crux of this whole argument, every and I mean every situation differs. What will get IRS to audit someone may not get them to audit another. Every situation differs. Even yours. Perhaps you have a lot of clothes perhaps they are new. check the IRS site out put in charitable donations in search bar and you'll get tons of pages to help you with your questions. Try it out.

For the person up above who put down turbo tax doing accounting for almost 26 years (see http://www.bcbsinc.com) with clients in almost half the US now, I have used every known program one can imagine. Let me tell you something. 1. I took a return from someone once, they did it with turbo tax and then they got confused and then came to us. Turbocrap and taxcrap both took same deduction twice in both places and if you're half way smart in taxes you could find that one easily. Both as a business deduct on sch C and as a unreimbursed employee business expense. No no people you cna't take same deducation twice. Forget it, people be careful these programs are not as great as you believe they are. If you truly know accounting you'll find out that soon enough. True story I am not trying to sell anything here. and I don't dislike initut at all. I use their programs a lot. Just not that junk. You know even the best tax programs have flaws even the ones people like me use, accountants. So be careful. You may pay for it if you dont'.

Wayne

Get receipts and you will be able to get a write off.

yes you can - when you go to the salvation army ask for a voucher with the value of the clothes you donated. this is your proof to provide the IRS for your filing.

Yes, you can donate to any non-profit organization, like the Salvation Army, and get a tax deduction if you file a Schedule A for itemizations. Contributions made after 8/2006 have changed somewhat. The new law states that "No deduction is allowed for contributions of clothing or household goods unless the items are in good used condition or better. This rule does not apply to donations of a single item valued at $500 or more if a qualified apprasial is included with the return. (NOTE: The new law does not define "good used condition"). As long as you have a receipt from the Salvation Army, or other qualified organization, that you filled out with the date, descriptions of each set of goods that were donated, (10 pairs of good pants) and how you determined the fair market value (newspaper ads, thrift shop,etc..) , you shouldn't have to worry. If the amount seems too much for the IRS and you get audited, you'll have the receipts as proof. It won't hurt to take pictures of the things donated as additional proof.

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