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Expert Q&A for How to Calculate Clothing Donations for Taxes
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QuestionHow do you determine a fair market value?Darron Kendrick is an Adjunct Professor of Accounting and Law at the University of North Georgia. He received his Masters degree in tax law from the Thomas Jefferson School of Law in 2012, and his CPA from the Alabama State Board of Public Accountancy in 1984.Fair market value is generally defined as what a willing buyer would pay a willing seller in a transaction where neither parties are compelled to buy or sell. See IRS Publication 561 for details.
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QuestionHow much can you write off for Goodwill?Darron Kendrick is an Adjunct Professor of Accounting and Law at the University of North Georgia. He received his Masters degree in tax law from the Thomas Jefferson School of Law in 2012, and his CPA from the Alabama State Board of Public Accountancy in 1984.You can write off any amount of contribution as long as it is substantiated and reported according to IRS guidelines. There are different rules for different types of donations. There are also percentage of income limitations for very large contributions. See IRS Publication 526.
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QuestionWhat is the most you can claim for charitable donations without a receipt?Darron Kendrick is an Adjunct Professor of Accounting and Law at the University of North Georgia. He received his Masters degree in tax law from the Thomas Jefferson School of Law in 2012, and his CPA from the Alabama State Board of Public Accountancy in 1984.IRS publication 561 has the guidelines needed to value donations made to charity. It depends on what is donated and the value to be claimed. Generally, deductions of less than $500 are not required to be separately reported.
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QuestionHow do I calculate my donations to Goodwill?Darron Kendrick is an Adjunct Professor of Accounting and Law at the University of North Georgia. He received his Masters degree in tax law from the Thomas Jefferson School of Law in 2012, and his CPA from the Alabama State Board of Public Accountancy in 1984.Donations are typically deducted at their fair value or may be valued based on thrift shop value.
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QuestionHow can I price donated children's clothes?Darron Kendrick is an Adjunct Professor of Accounting and Law at the University of North Georgia. He received his Masters degree in tax law from the Thomas Jefferson School of Law in 2012, and his CPA from the Alabama State Board of Public Accountancy in 1984.As suggested in the article, it's a good idea to use the prices posted at stores like Goodwill. For children's clothes, you could also use prices at a children's consignment shop or a local thrift store. If the prices aren't posted, ask an employee. They are usually happy to help.
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QuestionWhat if I can't remember purchase price/date/store? Can I still claim it if I take pictures, document other info and get receipt, or will it be a nightmare if audited?Darron Kendrick is an Adjunct Professor of Accounting and Law at the University of North Georgia. He received his Masters degree in tax law from the Thomas Jefferson School of Law in 2012, and his CPA from the Alabama State Board of Public Accountancy in 1984.As long as you get a receipt from the place you donated to and, if possible, document the condition of the items, you should have no problem.
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