Donating for Dollars

When you donate to a recognized charity, many times your donations are tax deductible. This affords you the opportunity to get a little extra back for items you aren’t going to use anyway. You need to make sure you keep an accurate list of all the items you donate, because you’ll have to report your donation to the IRS.

Currently, all items donated to charity must be in good condition or better. Under the old tax laws, you could receive a tax benefit for items donated in fair condition, simply because they had some sort of value. However, today the standard is set that all items are in decent condition and able to be reused.

You’ll have to make a determination of the value of the goods you donate, and there are several methods for doing so. You can simply record the value using a pen and paper, or you can use specially designed computer software to track the worth of your items. You should have a list of all the items you donated as well as the value of each item.

You don’t have to turn the list into the IRS, though you should store it with the rest of your tax documents. Also, remember to get a receipt from the charity as proof that you made a donation. The amount of the donation will not be listed on the receipt, but it will serve as adequate documentation should you get audited.

Donations of goods between $250 and $500 require a written letter of acceptance from the charity. Typically, this happens in the case of vehicle or boat donations. Additionally, if your donation is greater than $500, you’ll need to file Form 8283 with your regular tax return.