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  • Tax Tip: Giving Items to Goodwill and Charity

Tax Tip: Giving Items to Goodwill and Charity

Brent Pittman —  02/27/2013 — 3 Comments

Each year we drop off items to Goodwill, The Salvation Army, or another charitable organization.

When they ask if you want a receipt? Sure, I’ll take it and count it off on my taxes! But, do you and do you do it correctly?

How to Get a Tax Deduction From Your Donation

I’m always learning something new about taxes. This year I learned from our tax guru, John Kristianson, about how to properly get your deduction from donations.

1) In order to quality, you’ll need to meet the minimum amount in order itemize your taxes.

2) Make sure you take a picture of the items you give. Seriously, I heard about a guy who was being audited and they were questioning if he really gave. He had pictures, so that ended the discussion with the IRS.

3) Get a receipt and number count for the items.

Example of receipt from Goodwill

4) Calculate how much the items are worth. What? Yep, and there are valuation guidelines. Here is the Donation Valuation Guide for Goodwill and The Salvation Army Valuation Guide.

5) Add them up and turn it into your tax professional or perhaps you do it yourself on Turbo Tax?

Giving to organizations like Goodwill and The Salvation Army most importantly help your immediate community and provide jobs for those re-entering the workforce.

The Goodwill of Southern California received 4 Stars from Charity Navigator! Less than 1% of non-profits receive this high of rating and 92% of their profits and contributions directly towards people and services.

Need to find a store? Goodwill Location Finder

What is the most unique item you’ve given or purchased at a Goodwill type store? 

Photo Credit: Retailmania

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Brent Pittman

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Brent is a financial coach and writer looking for the perfect donut. He believes personal finance should be both fun and accessible to anyone willing to learn.
  • http://www.modestmoney.com/ Modest Money

    I had never thought about getting a receipt for goodwill or charity donations.  Then again, the stuff I usually donate such as clothes and small household good, it probably doesn’t add up to enough to be worthwhile.  I probably wouldn’t meet their minimum levels.

    • http://www.ontargetcoach.com/ Brent Pittman

      Here’s a link about taking standard deduction vs. itemized. http://www.irs.gov/newsroom/article/0,,id=105101,00.html

  • John@MoneyPrinciple

    In the UK there is a simple Gift Aid system. The donor signs a form giving address and stuff. The charity can then reclaim the basic rate tax paid for the gift. If the donor is on higher rate taxation, s/he adds the donation to their tax return and is paid the balance back as a rebate. It is quite a good system really, particularly as many people on higher rate tax just forget the second bit!