While it’s easy to deduct cash donations to charity on your annual tax return, you’ll have to work a little harder to deduct donated goods.
The IRS has several requirements in place for non-cash donation deductions, including:
- Clothing and household items must be in good used condition—or better.
- Your receipt from the charity must include the organization’s name, the date and location of the contribution, and a detailed description of the items you donated.
- For donations valued at $250 or more, your receipt must also state whether you received goods or services in exchange for the contribution (and the value of those goods/services).
- Gifts valued at more than $500 must be substantiated by records stating how and when you acquired the property.
- Non-cash contributions valued at more than $5,000 must be professionally appraised.
In short, it’s not good enough to drop a bunch of bags off at your local Goodwill or Salvation Army and make up a number for your tax return. Should the IRS decide to audit you, you’ll need receipts and other materials to support your claims.
Want to learn more about non-cash contributions this tax season? Taxation Solutions, Inc. is standing by to take your call. In and around Charlotte, we’re your source for knowledgeable and skilled tax help. We’re ready to answer your questions!