How to Calculate a Tax Deduction for Donations to Goodwill
Donations to Goodwill and other charities are tax-deductible. To deduct charitable donations to Goodwill, you must itemize the deductions that you take on your income taxes. It is best to consult with a tax professional to evaluate whether this is worth doing, and many tax professionals advise that you itemize every other year because of the additional work involved in calculating each deduction.
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Instructions
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Determine quality. To take a tax deduction for goods donated to Goodwill, remember that the goods must be in good condition. Goodwill recommends that you consider whether you would give the item to a friend, and if you would, it is safe to consider the item to be in good condition.
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Value the donated goods. Goodwill provides guidelines on its website, but consider how much you would likely have to pay for the item (used) when valuing the goods. Remember that the goods are no longer worth what you originally paid for them.
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Keep detailed records. It is important to have records that indicate how much you donated and when so that you can support the claims you make on your tax forms. This will be very important if the Internal Internal Revenue Service audits your tax forms.
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Get a receipt. Although you are not required to obtain receipts unless your contribution is valued at more than $250, it is a good idea to get a receipt for each donation so that you have documentation of the charitable contribution in the event of an audit.
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Deduct the contribution. Enter the value of your charitable contributions on Form 1040 Schedule A. Be sure to enter the value of all qualifying charitable contributions on this form.
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Tips & Warnings
Your charitable contributions cannot exceed 50 percent of your income.
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