You can get tax deductions for Goodwill donations.
Goodwill is a large non-profit organization in the United States and Canada with a mission of "Enhancing the dignity and quality of life of individuals and families..."You can deduct your donations to Goodwill on your tax return if you so choose, making it a great way to support a good cause.
Step 1: There is a difference between itemized and standard deductions for Goodwill donations.
If you take Goodwill donations into account, you can deduct them from your Federal income taxes.When you file your taxes, you can either take a standard deduction based on your age, marital status, and income, or an itemized deduction, which takes all of your deductible activity into account.You can donate your goods if you take the standard deduction.It is in your best interest to take the itemized deduction if it will be bigger than your standard deduction.If you donated a lot of money to charity or had major uninsured medical expenses, you may be able to itemize deductions.There is an online IRS tax guide for more information.If you don't take your federal deduction, some states may offer a charitable contribution deduction.
Step 2: Donate items before you record them.
It's important to keep good record-keeping.It will be hard to remember exactly what you gave if you just throw an assortment of goods in a bag.It will be hard for the IRS to support your deduction claim if you can't remember what you gave." Its Deductible" is an app that can help you keep track of your donations.If you don't have receipts or a conservative estimate, you can use a spreadsheet to keep track of your donations.
Step 3: Donate items that are in good shape.
Goodwill and the IRS require that you donate items that are in good condition.Goodwill won't give you a tax deduction for damaged, dirty, or worn-out goods.It is against the law to try to donate items that you know are in bad shape.Check Goodwill's official donor guidelines for specific information about what is and isn't acceptable.Unless they are in "like-new" condition, certain items, like socks and underwear, won't be accepted.Some locations may still accept these items for resale.
Step 4: Take pictures of what you are donating.
It's a good idea to keep a record of your donations to Goodwill.The less risk you expose your deduction to, the better you are able to prove that you made your donation.Photographs can be used to prove that your items were in good shape when you donated them.There are special rules for items like cars or other vehicles, jewelry, fine clothing, artwork, or antiques, so refer to IRS Publication 526 to learn more about donating these types of things.
Step 5: It is a good idea to have valuable items assessed.
If you want to claim your deduction at the end of the year, you will need to have your goods assessed by a qualified appraiser.To be eligible for a deduction on your tax return, you will need to get your appraisal to sign on the form.You must have your items assessed no later than 60 days before donating them.The IRS has a vague definition of a qualified appraiser.One of the criteria is that the appraiser must have earned an appraisal designation from a recognized professional appraiser organization for demonstrated competency in valuing the type of property being appraised.The IRS's official guide on this subject can be found at http://www.irs.gov/instructions/i8343.html.
Step 6: You need to call ahead to make sure you get a receipt.
It's a good idea to check ahead of time to make sure that your local Goodwill store has someone available to give you a receipt for your donations.Goodwill locations will only be able to give a receipt during business hours.You won't get a receipt if you leave your donation in a collection box or simply leave after these hours.If you give the staff some warning so that they can prepare for you, it's usually helpful.
Step 7: The goods should be delivered to the Goodwill center.
The staff member at the Goodwill should be able to help you unload your goods.If the location is busy, your goods may be set aside for later inspection.I don't know where the nearest Goodwill location is.If you want to see a map of nearby Goodwills, you can input your city and state into the "Donation site" box.Goodwill has donation pickup services.If this option is open to you, call your local Goodwill.
Step 8: You should keep your receipt.
If you make a donation, the Goodwill staff member should ask if you want a receipt.Be sure to say yes.You can prove that you made a donation with this receipt.Different types of documentation are required by the IRS.Unless it is impractical to get a receipt, the organization's name, date of donation, and a brief description of the goods are required.Documentation of whether or not any goods or services were given to you in exchange is required.There must be an estimate of their value.The receipts can be very general.A receipt could read "1 box of clothing" instead of "5 shirts, 7 pairs of pants."Before you make a donation, it is a good idea to keep your own records.
Step 9: You can add up the value of your donations.
When it comes time to file your taxes, use the receipts you received for your donations to determine the total value of cash and goods you donated to Goodwill.If you keep good records of what you donate, you can use the official Goodwill valuation guide to figure out the value of your donations.Goodwill accepts a wide variety of goods.If there was a willing seller and buyer for the used item, the fair market value would be the estimated price.The price the item would fetch on eBay or a flea market is usually close to its fair market value.This is usually less than the retail price.
Step 10: You can record your donations on the Schedule A.
The form includes all charitable donations throughout the year.The section labeled "Gifts to Charity" has your totals entered.You can find a copy of Schedule A at the IRS website.This is not the same as the basic form.If you donate more than 50 percent of your adjusted gross income, you can't claim it on your tax return.It can be carried over to the next year's tax return if you donate more than 50 percent.
Step 11: If your goods totaled more than $500, you need to complete Section A of Form 8283.
You need to fill out a separate form called "Non Cash Charitable Contributions."You will need to give information on the items you donated, the organizations you gave to, and so on.Personal records and receipts will be helpful here.The form can be found at http://www.irs.gov/pub/irs-pdf/f8343.If your donations exceed $5,000, you only need to fill out the first page.
Step 12: If your donations exceed $5,000, fill out Form 8283 on Section B.
There is more work to be done on the second page of the 8283 form.You will need to give more information about the items you donated, including an explanation of how you got them.You will need to get your donations appraisals.Section B of the form is located on the second page.
Step 13: If you donated more than $5,000, you should get your appraisal's signature.
Section B of Form 8283 requires a qualified appraiser to sign it.Part III, "Declaration of Appraiser," should be filled out by the appraiser.You can use the same appraisal for your high-value items.For more information, see the step regarding appraisers.All of them have to sign the 8283.
Step 14: If your donation was more than $5,000, Goodwill will sign it.
The person or organization that received your donation must sign the "Donee Acknowledgement" at the bottom of the 8283.The organization needs to include their EIN.The Donor Acknowledgement must be signed by an official authorized to sign the tax returns of the organization or a person specifically designated to do so, according to the IRS.When you get the signature, you must give a copy of Section B of the 8283 to the doner.
Step 15: All of your documents should be included with your tax return.
After you fill out your deductible information, complete your tax return.You should include your extra forms with your return.Schedule A, Form 8283, and copies of your personal spreadsheet are included.Thank you!You claimed your deduction after completing your tax return.If you are audited, make copies of your supporting documentation and keep them in a safe place.