Read this tip to make your life smarter, better, faster and wiser. LifeTips is the place to go when you need to know about Tax Deductions and other Taxes topics.
Each year-end finds a flurry of taxpayer donations being taken to local nonprofits in order for taxpayers to claim charitable donation deductions. The IRS has certain guidelines that must be followed in order to qualify for this deduction.
In order to get the IRS deduction for donating clothing and household items, certain qualifications must be met. For clothing and household item donations made after
October 17, 2006, items valued less than $500 must be in good or better used condition in order to qualify for the deduction.
If the items are valued at over $500, the condition does not matter in order to qualify for the deduction.
In both cases, get a statement from the charitable organization stating the item's value and description of what item was donated. You do not need to file this statement with your tax return, but you need to keep it for your records. To get an idea of the fair market value of your items, check out the prices at your local thrift store. The prices found on thrift store items are equivalent to the fair market value.
Also, it is important to note that a cancelled check is sufficient evidence for donations of clothing and household items valued at less than $250.
FYI: Congress has been asked by the IRS to implement regulations denying deductions for minimal value clothing and household items. Minimal value is now considered $500 or less.
|Sheri Ann Richerson|