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Message
Tax deductions for clothes donations
Posted on 7/23/13 at 8:41 am
Posted on 7/23/13 at 8:41 am
I will be moving at the end of this month and I have been packing in my spare time as of late. I have a box of clothes that I am going to go through and remove the items I no longer want to keep. What are some of the basic steps I should follow for guaranteeing I have a record of my donation at the end of the year? I have not decided whether I will give it to Goodwill or something more local as of yet, although I do know I will be giving up some clothes.
1
Posted on 7/23/13 at 8:44 am to RickAstley
Up to $500, no receipt needed...
But Goodwill will give you a blank receipt that you can fill out on your own, if you so choose.
But Goodwill will give you a blank receipt that you can fill out on your own, if you so choose.
Posted on 7/23/13 at 9:02 am to Lsut81
quote:
But Goodwill will give you a blank receipt that you can fill out on your own, if you so choose.
If you are interested in the charity part, Goodwill is the last place you want to go. They are just like any other business. Bring it to Salvation Army. Turbo Tax also has a cool little tool that links into ebay to give you true value of your items.
This post was edited on 7/23/13 at 9:03 am
Posted on 7/23/13 at 9:05 am to HeadyMurphey
quote:
If you are interested in the charity part, Goodwill is the last place you want to go
I am already leaning to a local charity rather than Goodwill. I am using it those a point of reference for this example
Posted on 7/23/13 at 9:06 am to Lsut81
quote:
Up to $500, no receipt needed...
Sorry for being naive, you are saying I could basically claim that I gave away $500 worth of clothes this year without record?
Posted on 7/23/13 at 9:07 am to RickAstley
quote:
Sorry for being naive, you are saying I could basically claim that I gave away $500 worth of clothes this year without record?
yep
Posted on 7/23/13 at 9:07 am to RickAstley
quote:
I am using it those a point of reference for this example
I hear ya. I only mentioned that because I only recently learned that Goodwill is not a charitiable org.
Posted on 7/23/13 at 9:09 am to Lsut81
quote:
But Goodwill will give you a blank receipt that you can fill out on your own, if you so choose.
While this is true, if you try to deduct an amount over $500 you would then have to fill out a form 8283. Might make it not worth it to fudge the numbers.
Posted on 7/23/13 at 9:13 am to RickAstley
quote:
Sorry for being naive, you are saying I could basically claim that I gave away $500 worth of clothes this year without record?
This isn't really true. You need to have acknowledgement from the organization of your donation. In other words, the blank receipt they give you is acknowledgement from them. You need to keep that blank receipt. What you put on that receipt is up to you, but I would recommend keeping the receipt. Read publication 526 put out by the IRS if you want good information.
Posted on 7/23/13 at 9:21 am to RickAstley
quote:
Sorry for being naive, you are saying I could basically claim that I gave away $500 worth of clothes this year without record?
Yup...
Posted on 7/23/13 at 9:32 am to Lsut81
quote:
Sorry for being naive, you are saying I could basically claim that I gave away $500 worth of clothes this year without record?
Yup...
More bad information.
quote:
Deductions of At Least $250But Not More Than $500
If you claim a deduction of at least $250 but not more than $500 for a noncash charitable contribution, you must get and keep an acknowledgment of your contribution from the qualified organization. If you made more than one contribution of $250 or more, you must have either a separate acknowledgment for each or one acknowledgment
Directly from the IRS publication. Advice to OP - read the publication for yourself.
Posted on 7/23/13 at 9:46 am to PurpleAndGold86
Thank you for the advice. I rarely think to read any of the IRS publications. They tend to be very helpful whenever I read one with a dictionary by my side and an advil.
Posted on 7/23/13 at 9:48 am to PurpleAndGold86
quote:
More bad information.
What you are saying is true for single donations, but not cumulative...
If I make 2 donations of under 200 and then 1 of 100, I am not required to have receipts for those transactions. And the way I have read it and the Turbotax and other software states, is that as long as your total claim on your return is under $500, you don't need to include receipts
Posted on 7/23/13 at 9:51 am to Lsut81
quote:
If I make 2 donations of under 200 and then 1 of 100, I am not required to have receipts for those transactions.
Yes you are. Read the piece of the publication I just posted. You need to have separate acknowledgements if you have any number of contributions that add up to an amount between $250 and $500.
quote:
is that as long as your total claim on your return is under $500, you don't need to include receipts
This is original receipts. You do not need to have original receipts if your contribution is under $500. You do need to include a written acknowledgement containing a description of what you donated.
Posted on 7/23/13 at 9:53 am to PurpleAndGold86
Here is more information:
quote:
Deductions of Less Than $250
If you make any noncash contribution, you must get and keep a receipt from the charitable organization showing:
1.
The name of the charitable organization,
2.
The date and location of the charitable contribution, and
3.
A reasonably detailed description of the property.A letter or other written
Posted on 7/23/13 at 9:58 am to PurpleAndGold86
You may be right from the letter of the law, but from Turbo Tax's website and any other website I have ever seen...
The one I use states something to the extent of "Any noncash donations claimed exceeding $500 will require a receipt". So I don't know if its just known that you won't be audited for under 500 and you don't need a receipt or what.
quote:
When you use TurboTax, the ItsDeductible feature will accurately value your donations in compliance with IRS guidelines to maximize your tax savings. No matter whether you donate cash or goods, be sure to get a receipt. If you donate something worth more than $250, a receipt is required.
The one I use states something to the extent of "Any noncash donations claimed exceeding $500 will require a receipt". So I don't know if its just known that you won't be audited for under 500 and you don't need a receipt or what.
Posted on 7/23/13 at 10:03 am to Lsut81
quote:
So I don't know if its just known that you won't be audited for under 500 and you don't need a receipt or what.
The odds of an individual being audited are slim to none - whether or not you claim you donated $1,000 or $200 those odds will not increase or decrease any. With that being said, in the slim event that I do get audited, I would want to have a receipt from the organization that I donated to. I never claim more than $500 in a year for this deduction and I am always going to trust what the IRS publications say over TurboTax - and not always, but certainly in this case, what the IRS publication says is pretty clear cut. Me and my wife are both CPAs for the record, so I am always going to air on the side of caution.
This post was edited on 7/23/13 at 10:05 am
Posted on 7/23/13 at 10:07 am to PurpleAndGold86
quote:
so I am always going to air on the side of caution
As do I, I always grab one whenever I drop shite off... Prob have 3-4 already this year. But I have never had to use one and have never thought of it because, like I said, the software I use states "Donations equaling more than $500 require a receipt"
Could someone sue the software company if they claimed under 500 and then were subsequently audited and didn't have proof
Posted on 7/23/13 at 10:12 am to Lsut81
quote:
Could someone sue the software company if they claimed under 500 and then were subsequently audited and didn't have proof
I'm no lawyer, but I have a feeling that you wouldn't really get anywhere because it doesn't sound like the software says "If you donate under $500 you do NOT need a receipt". It simply says anything over $500 does require a receipt. I don't know why they don't tell you to keep it when the IRS says that you should
. Like I said, I just think it is always good to be safe rather than sorry. I don't think there is much of a chance of someone filing a very basic return with $500 bucks in charitable contributions getting audited, but I would still keep it as a record.
Posted on 7/23/13 at 10:14 am to PurpleAndGold86
Since you are a CPA, how would it play out if you were indeed audited for donations?
I mean, the receipts that most places give you are just signed and dated and you are responsible for assigning value and how much you gave. So is there really any way for them to prove whether or not you gave that amount?
Lets say I had 5 of those receipts and put that I donated $1000 each time. How could they prove that I didn't indeed donate that much
I donate a lot more than $500 each year, but always claim less because, as the software words it, you are less likely to raise a red flag....
I mean, the receipts that most places give you are just signed and dated and you are responsible for assigning value and how much you gave. So is there really any way for them to prove whether or not you gave that amount?
Lets say I had 5 of those receipts and put that I donated $1000 each time. How could they prove that I didn't indeed donate that much
I donate a lot more than $500 each year, but always claim less because, as the software words it, you are less likely to raise a red flag....
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