How Much Can I Deduct for Items Donated to a Thrift Store?
The federal tax law authorizes a deduction for taxpayers who donate property or money to a charitable nonprofit organization. There are numerous requirements you must adhere to depending on the type and value of the property you donate. However, applicable to all donations is the requirement that you do not receive a benefit from the organization for making the donation. If you do, you must subtract the benefit's value from the deductible amount.
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Thrift Store
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You can take a charitable contribution deduction if the thrift store meets the requirements of a qualified organization. The IRS defines a qualified organization as any community chest, corporation, fund, trust or foundation that is authorized to operate pursuant to federal or state law, the laws of the District of Columbia or a possession of the United States. The activities of the thrift store must be restricted to religious, charitable, educational, scientific, literary or humanitarian purposes.
Household Goods
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You can deduct the fair market value of all household goods you donate to the thrift store. Household goods can include furniture, appliances and kitchenware. The property you donate must be minimally in good usable condition to take a deduction. Goods that need significant repairs or that are obsolete have a zero fair market value. If the item you donate is not in good condition and you assess a value of $500 or more for it, you must obtain a qualified appraisal before you can take a deduction.
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Used Clothing
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If you donate used clothing to a thrift store, the clothes must be in at least good condition. This requires that another individual be able to wear the clothes without making significant repairs. When you value clothing, it should never be more than a fraction of what it costs brand new. There is no standard method for valuing used clothing; however, you should refer to the price that the thrift store intends on selling each item for or compare prices that other consignment shops ordinarily charge for similar clothing. If you donate clothing that is not in good condition and value it at $500 or more, you must provide the IRS with a qualified appraisal as proof. For example, you may donate a fur coat that is in poor condition and in need of repair, but is still worth thousands of dollars.
Deduction Limitations
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You can deduct the full value of all thrift store donations plus any other charitable donations you make during the year that do not exceed 30 percent of adjusted gross income. However, the IRS increases the limitation to 50 percent of adjusted gross income for the total annual donations you make to a "50-percent-limit-organization." The IRS publishes a list that includes each specific organization that qualifies.
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