Tips on Donating Used Clothing and Household Items
Giving as much thought to where you give your clothing and household items as to where you make cash donations can help assure you that you’re not just cleaning out but truly helping others.
1. If you get a phone solicitation for a local goods pick-up, don’t hesitate to ask what charity will benefit from your donation, and how. If the solicitation comes by mail, contact the source and ask the same things.
2. Don’t assume that all thrift stores are run to benefit a charitable cause. While the name of the store may identify the charitable affiliation, charity-sounding names have been used by for-profit stores with no connection to charity. If in doubt, ask the store to identify the charity it’s affiliated with and then contact the charity to verify the arrangements.
3. For drop-off boxes, the same advice applies: verify, verify. If there’s a phone number on the bin, call it for information. Expect straight answers. Be wary of names you don’t know or that seem similar to ones you know. State charity regulators frequently report taking actions against for-profit dealers who have used charities’ names on their bins without authorization.
4. Feel free to ask a charity how it is benefiting from a clothes collection. Arrangements vary widely. Used clothing may be sold in the charity’s store, but the charity may also sell it to a third party for a fixed fee, such as $2 for each “bag” of items received, for example. Or the charity may sell it to a company that sells it overseas, to one that will turn it into rag bond paper, or to one that will sell the items in its stores and give the charity an agreed percentage of sales.
5. Don’t assume that charities welcome all second-hand items. If you have any questions about an item’s acceptability, call the charity and ask.
6. Before you donate used goods to a charity, check with your local Better Business Bureau to see if it has information on the organization.
Tax tips
Tax deductions for donated goods are available only to donors who itemize their deductions on their returns. If you want to take a deduction, consider first whether the donated items are in good used condition or better.
The IRS has not further defined these terms, and you should not ask or expect charities to assign values to the goods you donate. That is your responsibility.
Make a list of the items you’re donating. If you have photos, attach them. Consult the guides often available where you donate. The Valuation Guide on the Salvation Army website, www.salvationarmyusa.org, gives both a low and a high value for many frequently donated items, which it says are average prices in its stores for items in good condition. Examples, low/high:
Women’s blouses - $2.50/$12.00
Men’s suits - $15.00/$60.00
Sofa - $35.00/$200.00
Be sure to get a receipt from the organization to which you donate. Typically it will show very generally what was received: “5 bags of clothing,” for example.
Attach your back-up materials to the receipt and keep it with your tax records.
If you are donating a single item valued at over $500, you will need to include a qualified appraisal with your tax return. If the cumulative amount of non-cash deductions is over $500, you will need to complete and attach IRS Form 8283 to your next tax return.
If you are providing goods directly to a for-profit resale store or if your merchandise is sold on a consignment basis, in which you get a percentage of the sale, the donation is not deductible.
For more deductibility information, consult an accountant and/or see IRS Publications 526 and 561.