How to Value Clothing for Tax Purposes

If you are trying to determine the value of your donated clothing for tax purposes follow my few tips to report an accurate estimation for tax return processes.

Difficulty:

Easy

Instructions

Things You'll Need

• List outlining donated clothing items, including accessories
• Receipts from clothing expenses
• Calculator

1. 

   Did you know that you can receive tax credits for donating clothing? If you itemize, you can use this information to receive that credit. All clothing is different. It ranges from cheap quality to luxurious quality. It ranges in price from $.99 (or less) to $1000's. Include expenses from accessories as well. They are part of a wardrobe.

2. 

   Keeping track of what you spend on clothing is important. You should practice keeping a budget for clothing allowance. Maintain receipts, especially for expensive clothing and accessories. If you purchase designer items, keep all paperwork and original packaging if possible. This will always improve the resale cost of your investment.

3. 

   Keep an itemized list of what items you choose to donate and if possible, list their retail costs. A general rule in resale is to price an item at 30% of its retail cost. More expensive items (over $150 retail) should be calculated at about 35-40% of its retail cost. This should give you an approximate idea of how to claim it on your taxes. You can figure it out on the calculator by entering the retail price and multiplying it by 30 %.

4. 

   Be reasonable! If you're clothing has major condition issues, it should be tossed not donated! If your donated items had flaws or condition issues at the time of donation, they aren't worth as much. These few steps will give you a better estimate when requesting tax receipts to the locations you choose to donate to.

Tips & Warnings

• Don't forget when donating your used clothing to ask for a receipt for tax purposes.

• Always factor in the condition of your items at the time of donation. If they were well-worn, had rips, tears, stains, or broken zippers don't expect as much as 30%, best calculated at $.50 - $5.00.

• Always follow the IRS tax laws when preparing to file your taxes