How to Calculate the Tax Deduction for Donated Clothing
The Internal Revenue Service offers taxpayers the ability to deduct the value of donated goods, such as clothing, from their income taxes. However, in order to claim the donation, you must forgo the standard deduction and itemize your taxes using Schedule A and filing your taxes using form 1040. To figure out how much the tax deduction will save you, you need to know the value of your donated clothing and your income tax bracket.
Other People Are Reading
Instructions
-
-
1
Compare your taxable income, found on line 44 of form 1040, to the income tax brackets for the current year to find your marginal income tax bracket. The income tax brackets can be found in the most recent version of IRS publication 17. The marginal income tax bracket is the highest tax rate you pay. For example, for 2010 if you file as head of household and your taxable income equals $90,000, you would fall in the 25 percent tax bracket.
-
2
Estimate the fair market value of your clothing that you donated to charity. Some charities offer ranges of fair market values (see Resources) to assist your valuation. If the clothing is worth more than $5,000, you must have it professionally appraised.
-
-
3
Multiply the tax bracket percentage by the value of your deduction to determine how much you will save because of your donation of clothing. For example, if you fall in the 25 percent tax bracket and donate $400 worth of clothing, you would save $100 on your taxes.
-
1
Tips & Warnings
You cannot deduct clothing in worse than good condition unless it is worth at least $500 and you have it professionally appraised.
References
Resources
- Photo Credit tax forms image by Chad McDermott from Fotolia.com
