Charities use thrift stores to raise money.
Giving your old clothes and household items to a thrift store is a great way to clean out your closet and do a good deed at the same time. The thrift store sells the items you donate and uses the money to support its works, while shoppers scoop up the bargains. You may be eligible for a tax break for the items you donate, making that contribution that much more valuable.
Itemized Deductions
The Internal Revenue Service provides a tax deduction for charitable giving, but that deduction is only available to taxpayers who itemize their deductions. If the total of your charitable giving and other itemized deductions is less than the standard deduction provided by the IRS, you cannot benefit financially from donating items to the local thrift store. You can still benefit personally, however, by giving those items to a worthy cause.
Drop Box
Many charitable organizations, including the Salvation Army, now provide convenient drop boxes where people can donate clothes and other items. But while those drop boxes are convenient, you should not use them if you plan to take a deduction on your taxes. If you plan to take a write-off for your donations, you should drop off your goods in person and request a receipt from the person taking the donations. Keep that receipt with your tax records and use it to prepare your return.
Fair Market Value
When you donate clothes and household items to the local thrift store, you are entitled to a write-off for the fair market value of those items. Valuing used clothing can be tough, however, and it can be hard to determine exactly how much your old items are worth. One way to gauge the value is to visit the thrift store and browse through the racks. Check out the prices of similar items and use those prices to value your own donations.
Document Your Donation
No matter what you donate to charity, you should document those donations carefully. You need to be able to prove that the items you donated were as valuable as you claimed, and having photographing evidence is one of the best ways to do that. Before you make your donation, take a few minutes to photograph each item. Take a digital photo of each item from several angles, then save the pictures on a flash drive and keep it with your tax records. If the Internal Revenue Service questions the value of your donation, you can turn to those photos to show the condition of the items and substantiate their worth.
Tags: thrift store, charitable giving, clothes household, clothes household items, donate clothes
