If you’ve been doing some spring cleaning or clearing out your winter wardrobe for your summer wardrobe, now is the time to start thinking about the tax deduction you can get donating your unwanted items to a thrift store, instead of waiting until the night before your appointment!
For items you take to a thrift store, such as clothing, shoes, toys, games, household items, furniture, appliances, etc, the valuation is the most difficult of most common contributions. The items must be in “good” or better condition, and you must use the FMV at the time of contribution, which is normally far less than the price you originally paid. You will claim as the FMV the price buyers will pay in thrift stores for those items. Many companies, such as Salvation Army and Goodwill, will have donation valuation guides on their websites, which can help tremendously in calculating the value of your donation.
In order to substantiate your deduction, the IRS requires documentation for these contributions. Documentation must be in the form of a receipt from the organization showing the name of the organization, the date and location of the contribution, and a description of the property. Many thrift stores will not write all the property donated, and will give you a receipt with space for you to write it yourself. The IRS also requires your own written records showing a detailed description of all property donated (i.e. an itemized list), as well as the FMV of the property at the time of the donation and what method you used to figure the FMV.
Written by Heather Posey