IRS offers a range of tax deduction options which can help you cut down your total tax debt. In this article, you will find information about tax deductions for clothing donations and the guidelines provided by the IRS to claim them.
Taxation is inevitable but its burden can be lessened through several deduction options granted by the IRS (Internal Revenue Service). The contributions you make to charity organizations are also taken into consideration and tax deductions are offered on them. You may even claim deductions on the clothing donations you make to charity over the course of the financial year.
No act of kindness goes without reciprocation. It is a fact of life that there are no selfless good deeds. If you have donated a substantial amount of clothing to any charitable organization in the recent past, not only do you have the immense satisfaction of helping out someone, you can also get a tax deduction on it. So next time you think about throwing away your old clothes, think again, you could donate it to a charity and also claim tax deductions in the process.
IRS Clothing Donation Guidelines
Firstly, only donations made to charitable organizations, which are qualified by the IRS itself will be considered to be tax deductions. So check out the IRS website for information regarding the qualifying organizations before donating your clothes (Refer to Publication 526 of the IRS, to know what is defined to be a ‘Qualified’ charitable organization).
For claiming deductions on clothing, you will need to create a list of items you donate with the fair market value for each. For deductions to be claimed on donations made after August 17, 2006, you need to ensure that the clothes are in ‘good used condition or better‘ (quoting the IRS guidelines). If the deduction amount for any single item exceeds $500, you must include a qualified appraisal for it. In case the total deduction value is greater than $5,000, you need to get an appraisal from a qualified professional and attach it with the duly filled Section B of Form 8283 attached to the main tax return document.
In case the total amount of tax deductions claimed for the year is less than $500, including the clothing donations, the exact sum must be entered in Line 17 of Form 1040 , which falls in schedule A. As mentioned before, for any item exceeding $500 in deduction value, you must attach the filled section B of form 8283. The total deduction value cannot be more than 50% of your gross adjusted income.
How to Value Clothing for IRS Deductions?
You need to take help of a qualified appraiser for large clothes donations. You will need to have receipts of all donations made to charitable organizations as documentary evidence and a report of the appraiser which needs to be attached in written records. Make sure that the prices of all items are what can be termed as ‘Fair Market Value‘. It is the price at which the clothing item would be sold in markets or in thrift stores.
For more details regarding deductions that can be claimed on donations of other kinds, visit the IRS website, which has detailed circulars regarding the same. Of particular interest would be the IRS publication 526 which provides guidelines regarding all donation related tax deductions.
The most important thing to remember is to get a receipt from the charitable organizations, to whom you donate your clothes. A valuation of the clothing from the organization itself would be helpful. Making an itemized list of donations and mentioning the appraisal value of each donated item are two things which you need to do meticulously to claim deductions for clothing donations.