Taxes & Charitable Household Gifts
Cleaning out your closets and cabinets can provide more than just extra space in your home. If you donate items to a local charity instead of tossing them in the dumpster, it may reduce your tax bill for the year. You won't be able to take a charitable deduction for items that are broken and unusable, however.
Other People Are Reading
-
Charitable Organizations
-
Make sure the charity you decide to donate your household items to is an IRS qualified organization. Sometimes, what may seem like a charitable organization is really a thrift store operating for a profit. The general guidelines require that the charity be organized under U.S. law, not be profit-driven and limit its activities to those that promote charity, science, education, literacy, religion or humanitarian purposes. These organizations include most churches and the Salvation Army.
Condition
-
Furniture, kitchen appliances and linens are typical items to donate. To prevent taxpayers from claiming a deduction for donations that are worthy of the trash bin, the IRS requires these goods to be in good useable condition; in other words, someone must be able to use the items without making major repairs. For example, suppose you want to donate a used blender that needs a new motor. This is not good useable condition for which you can claim a deduction; however, if the only problem is that one of the buttons gets stuck, the blender is in good condition since it can still be used for its intended purpose.
-
Valuing Household Items
-
As with any charitable contribution, the deduction is equal to the value of the donation. This is easy to calculate when you donate cash or property that commonly sold. Household items do present a challenge to taxpayers when it comes to determining an item's fair market value; for example, the difference between a blender that is 15 years old and one that is only 8 years old. When dealing with low-value items such as this, the best way to determine value is to see what a local thrift store, such as the Salvation Army, is charging customers for similar items in its store. You can also look online to get an idea of what your items are worth as well. There is no prescribed method, but whichever you choose must reflect what a willing buyer will pay for the items.
Reporting
-
Generally, you can itemize your deductions if your total expenses for the year exceed the standard deduction for your particular filing status. A good starting point is the instructions to Schedule A, which tells you all the types of expenses eligible for itemization. Make sure you are eligible to itemize your deductions; otherwise, you can't claim a charitable deduction.
-
