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Donating Your Clothes & Getting That Tax Deduction,
Without Being Audited
When donating clothes for the tax deduction, the worst thing you can do is to drastically overestimate the
donated clothing value and trigger an alarm bell. Triggering a red flag will send the IRS man running to your
home to request receipts and proof of your donation. Because charitable donation is one of those tax items
frequently abused by taxpayers, the IRS closely scrutinizes such claims.
1) Gather All Your Unwanted Clothes and Organize Them – Most usable articles of clothing, including
shirts, jackets, coats, shoes, dresses, socks, neckties, and suits, may be donated to local thrift shops and
charitable institutions.
2) Make A Detailed Record Of Your Donated Items – While it is likely no questions of your donation will
ever arise, it is still important to keep a detailed list of your donation in case questions arise or you get audited
on the matter. Try to keep a spreadsheet chart or list of all articles donated, recording information such as the
number of clothing articles, the estimated dates of purchase, condition at the time of donation, the assessed fair
market value of each item, and perhaps even substantiation of how you calculated and arrived at the particular
valuation. I recommend taking photos for those items whose valuation may be a bit high and out of the norm.
3) Assign Appropriate Fair Market Value For Each Clothing Item – You are responsible for assigning the
proper value for your charitable donations. The IRS permits taxpayers to only deduct the fair market value of
the donated clothing and household good. Fair market value is the reasonable price that an ordinary buyer
would pay for the item in a regular market situation such as at a flea market, on eBay, or at a thrift shop. Fair
market value is not the original purchase cost but the second hand used price that could be obtained in a thrift
store.
4) Deliver Your Donated Clothing To Charity – Most people donate clothing and other household products
through charitable organizations such as their local church, or through Goodwill and the Salvation Army.
Although you are not obligated to obtain a written receipt from the charity if the total value of the donated
clothing is under $250, you should still always request one for record keeping purposes.
5) Claim the Value Of Your Clothing Donation As A Charitable Deduction On Your Tax Return – Since
you went through all the trouble of donating your used clothing, be sure to take the appropriate deduction on
your tax return when you file. The total value of your charitable deductions cannot be more than 50 percent of
your adjusted gross income in any single year. However, donations exceeding the 50 percent limit can be
carried forward to future years.
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