Claiming a sizable deduction from a large donation to Goodwill..

[zanemoseley]

So my wife has been saving boxes and boxes of old clothes (both her and our daughter's) and kids toys for years. I have close to 30 boxes (about 20" x 16" x 14" each) of stuff that we were going to sell in a supposed "yard sale" that never happens. I'm been trying to talk her into giving the stuff to Goodwill and claim a tax deduction, I was thinking claiming roughly $100 per box. If we claimed a $2000-$3000 deduction for the donations it would boost our refund by probably $200-$300. I think she's finally decided to screw the yard sale and "give it to Goodwill".

When I've played around with Turbotax in the past it asks the obvious like where you donated the stuff too but also what method you used to evaluate what you gave. With a mix of stuff I guess you just put estimated replacement value or something. Am I going to set myself up for an audit by claiming $3000 in donations in one chunk? To me $100 a box for semi decent used clothes seems very fair but I'm not sure how the IRS views it. I was even thinking of taking a picture of all the boxes loaded in a truck to show them the volume of what I donated if I got audited. Of course they could say I staged the photo by loading empty boxes or something but it may be better than a small slip of paper from the Goodwill receiving dock.

 

[DrPizza]

Early this summer, since both kids are moved out, we gave them a "we're donating any clothes left behind" warning. They took what they wanted with the understanding that everything else was being donated. We filled, and I mean filled, at least a dozen 30 gallon trash bags with clothing from the kids closets, our closets, the spare closet, etc. Got the receipt, but I'll probably not even bother with putting it on the taxes. It's not that I'm worried about going through an audit; our tax returns are accurate - it's that I don't want to be bothered by an audit, digging through boxes upon boxes of stuff.

 

[JEDIYoda]

So my wife has been saving boxes and boxes of old clothes (both her and our daughter's) and kids toys for years. I have close to 30 boxes (about 20" x 16" x 14" each) of stuff that we were going to sell in a supposed "yard sale" that never happens. I'm been trying to talk her into giving the stuff to Goodwill and claim a tax deduction, I was thinking claiming roughly $100 per box. If we claimed a $2000-$3000 deduction for the donations it would boost our refund by probably $200-$300. I think she's finally decided to screw the yard sale and "give it to Goodwill".

When I've played around with Turbotax in the past it asks the obvious like where you donated the stuff too but also what method you used to evaluate what you gave. With a mix of stuff I guess you just put estimated replacement value or something. Am I going to set myself up for an audit by claiming $3000 in donations in one chunk? To me $100 a box for semi decent used clothes seems very fair but I'm not sure how the IRS views it. I was even thinking of taking a picture of all the boxes loaded in a truck to show them the volume of what I donated if I got audited. Of course they could say I staged the photo by loading empty boxes or something but it may be better than a small slip of paper from the Goodwill receiving dock.

Fisrt of all what does Goodwill say the boxes are worth?? That is the most important factor.....
Are you stating that you are going to claim that amount without any sort of receipts for the boxes?

Seems iffy at best to me...

 

[ssm0002]

Goodwill will not assign a value, you do that yourself. In an IRS audit you will have to prove cash purchase by showing actual receipts or credit card charges. To get a value you can go to Intuits turbotax website and look for a link to It's Deductible. Sign up, select which year you want to record your donations and then a list of donation types will be offered. They have market value estimates for a lot of the cloths you donated based upon what shape they were in when you donated them. Once all your data is entered you can import that data into turbo tax deluxe next tax year.

 

[zanemoseley]

Yep I remember donating stuff to Goodwill in the past and they just gave you a VERY simple receipt showing you dropped something off giving no indication of value or even the quantity if I remember.

I'll check out the deductible section on Intuits website.

 

[3chordcharlie]

count the actual articles of clothing in each box, and multiply by the $2 Goodwill is going to charge for it at their thrift store.

 

[JTsyo]

Take pictures of the boxes too, I guess.

 

[highland145]

Take pictures of the boxes too, I guess.

The govt is worse that ebay so yes.

 

[kranky]

Goodwill has a valuation guide.

http://www.goodwill.org/wp-content/uploads/2010/12/Donation_Valuation_Guide.pdf

I wouldn't push it too much given the volume of stuff you have, but if you use valuations in the middle of the range, you should be in the clear. I have a tax guy who told me keep donated items under $5000 per return. If you have more than that, just hold on to some of it until January.

 

[rudder]

Fisrt of all what does Goodwill say the boxes are worth?? That is the most important factor.....
Are you stating that you are going to claim that amount without any sort of receipts for the boxes?

Seems iffy at best to me...

Goodwill provides a receipt for tax purposes.

 

[who?]

A few years ago the IRS changed the rule on donated cars. You are only allowed to deduct whatever the charity got for the car at auction. There's probably a chart somewhere of the deduction value of used clothes.

 

[lxskllr]

A few years ago the IRS changed the rule on donated cars. You are only allowed to deduct whatever the charity got for the car at auction. There's probably a chart somewhere of the deduction value of used clothes.

Not saying you're wrong, but that sounds like bullshit. What if the value of the car was educational, and it got scrapped afterward? You only get scrap value for the car?

 

[BoomerD]

Not saying you're wrong, but that sounds like bullshit. What if the value of the car was educational, and it got scrapped afterward? You only get scrap value for the car?

http://www.irs.gov/pub/irs-pdf/p4303.pdf

 

[lxskllr]

http://www.irs.gov/pub/irs-pdf/p4303.pdf

Looks like my scenario is covered under the charity making use of the vehicle before it gets resold, and you'd get market value.

 

[IronWing]

count the actual articles of clothing in each box, and multiply by the $2 Goodwill is going to charge for it at their thrift store.

This is pretty much what the IRS says.
http://www.irs.gov/publications/p526/ar02.html#en_US_2012_publink1000229745

 

[waggy]

people go insane on giving away stuff and claiming it. I have seen people give away bags of shit and claim thousands and get nailed.

They figure they spent $4k on those clothes they can claim that amount. lol

 

[JulesMaximus]

I knew someone through work who claimed head of household because she was single and had a couple dogs... her tax guy advised her to do this. I told her she didn't qualify and that if she was ever audited she would be screwed.

Personally, I'd never claim more than $500 in donations. If that couple hundred dollars is important enough to you then I'd just try to sell it yourself.

 

[Red Squirrel]

Make a yard sale, donate all proceeds to charity and get a receipt, claim that. Probably safer that way. Or maybe you can get Goodwill to buy it, then you donate the money to them and they give you a receipt. Goodwill may not want to do something like that though, it's basically playing the system and they could maybe get in trouble if someone at the government got wind of it.

The government can do what it wants to get money from you, but you can get in trouble if you find ways to take from the government.

 

[zanemoseley]

I guess I'll use the nice Goodwill Valuation Guide that someone linked to, it seem pretty comprehensive and has fair/low values for stuff. I'll also photograph the haul in the back of the truck as evidence of the volume donated. I'm not going to be scared to claim a donation just in fear of being audited. We'll see lol.

 

[dullard]

The best way is to start a spreadsheet or get out a pad of paper. Write down the date / location of the donation and sign it. Write your initials and date on every page. Then record what was donated (ie woman's skirt), condition (good), and price (use that goodwill guide, nearby garage sale prices, software like mentioned above, etc). I generally just put $3 on every clothing item unless it is special for some reason (the IRS will never balk at that, they have to prove the item that they can't actually have in their possession was worth less than $3). You can group similar items (such as 10 kids jeans in great condition) to make the paperwork easy. Then take a photo of everything. Finally, get that Goodwill receipt.

Also note, fair or poor quality items can't be deducted. Goodwill will just throw it away, so save yourself the time, and Goodwill the cost and just toss them yourself. Fair and poor quality items would be clothing with holes in it or broken household goods.

That sounds like work, but it only takes an evening. Plus, it is very rewarding cash wish if you already itemize on your taxes. If you donate $3000 worth of stuff and are in the 25% federal / 7% state tax brackets, this could add up to $960 tax savings for you. Far better what you'd make from a garage sale. $960 for an evening is worth it.

 

[jaedaliu]

I knew someone through work who claimed head of household because she was single and had a couple dogs... her tax guy advised her to do this. I told her she didn't qualify and that if she was ever audited she would be screwed.

Personally, I'd never claim more than $500 in donations. If that couple hundred dollars is important enough to you then I'd just try to sell it yourself.

hrm..... IRS rewards the people that turn in cheats with a percentage of the amount they collect......

bleh, looked it up. http://www.irs.gov/uac/Whistleblower-Informant-Award your "friend" probably doesn't qualify with over 200k/year, so you would only receive a discretionary award.

 

[slag]

Goodwill will not assign a value, you do that yourself. In an IRS audit you will have to prove cash purchase by showing actual receipts or credit card charges. To get a value you can go to Intuits turbotax website and look for a link to It's Deductible. Sign up, select which year you want to record your donations and then a list of donation types will be offered. They have market value estimates for a lot of the cloths you donated based upon what shape they were in when you donated them. Once all your data is entered you can import that data into turbo tax deluxe next tax year.

Yep, this is what we had to do. You have to place a value on them based on what the online charts show a shirt is worth, etc, so that you can then tally up every freaking shirt, pant, shoes, etc, that you give goodwill. And good luck with the receipts, who keeps those for clothes more than 90 days out?

We just spent the better part of a day going through old clothes and marking down what we had and giving them to goodwill. Its a major waste of time. Goodwill should be doing this for us since we are donating the clothes to them, not the other way around.

 

[child of wonder]

My wife and I just donated about 5 garbage bags full of clothes to the local thrift store and have been claiming donations on our taxes the past few years. We keep a record of the items we donated, how many, and when they were donated. Anything not in good condition gets thrown away, not donated. Then I use Turbotax's deduction tool to value the goods, typically choosing medium value.

But I'm sure if the IRS decided to audit us they would deem all this not good enough and force their fist up my ass.

 

[kranky]

We just spent the better part of a day going through old clothes and marking down what we had and giving them to goodwill. Its a major waste of time. Goodwill should be doing this for us since we are donating the clothes to them, not the other way around.

I don't believe they are allowed to assign values - too much room for shenanigans from a non-profit. The onus is on the person claiming the deduction to be able to substantiate it.

 

[JulesMaximus]

hrm..... IRS rewards the people that turn in cheats with a percentage of the amount they collect......

bleh, looked it up. http://www.irs.gov/uac/Whistleblower-Informant-Award your "friend" probably doesn't qualify with over 200k/year, so you would only receive a discretionary award.

She was more of an acquaintance than anything. I don't even remember her name. Sherrie something... I worked at the same company but this was probably 6 or so years ago. She worked in doc control, I bet she made less than $15/hr.