Estimating the Value of a Donation
Almost all donations are valued by the IRS at their fair market value (FMV). According to the Internal Revenue Service, the fair market value of an object is the price at which a hypothetical buyer and seller would part ways if neither party felt compelled to do so. A reasonable level of knowledge is also required from B.1
A rough estimate of a product’s value may be listed on a company’s website, but users should treat these prices with caution. The Salvation Army, for instance, won’t give you cash in exchange for your donations, but its website does include a value guide with estimates for common products like televisions, computers, and couches.2
Items are valued at Goodwill depending on what they can typically sell for at each store. Assuming the item is not in terrible condition, Goodwill says the dollar values mentioned on their website, or 30% of the item’s original purchase price, should be a close estimate.3 The Internal Revenue Service stresses that this formula should not be used to determine the fair market value of furniture.
If you want to sell clothing or household goods on eBay, the IRS requires that they be in “good used condition or better.“4
The following are examples of donated apparel that may qualify for a tax deduction. The Salvation Army and Goodwill have determined these values. The Fair Market Value of Goodwill Calculator can also be used.23
Skirts for women cost $3-8, and dresses $4-$62.
Leggings: $4 - $23
Prices range from $2 for shoes to $30 for sweaters.
Clothing for Kids: Skirts $2–$6, Pants $2–$12, Dresses $2–$12
Prices range from $2 for sweaters to $10 for shoes or boots.
If you’re going to give away objects of what you believe to be above-average quality, you might wish to document their condition with photos before you do so. Used clothing typically has a much lower value in the marketplace than what you bought for it.4
Depending on the appliance’s category, its maximum resale value can range from zero to several hundred dollars. The value of some previously owned appliances could increase by as much as a factor of two or three if they have been meticulously maintained. Household appliances should be used with care and should still function properly.
Here are some potential tax deductions:23
From $21 to $93 for an AC unit
Color TVs cost between $78 and $233
From $10 to $50 for microwaves
Machines that do laundry: $46 to $232
Clothes Dryers: $47 - $93
Electric ranges cost between $78 and $156.
ranges that use gas can cost between $52 and $130
A vacuum cleaner can cost anything from $5 to $67.
If you wish to donate a DVD player or some outdated computer equipment, here is a rough estimate of how much you could get. For more expensive, high-tech electronics, you may need the assistance of an assessor or other professional.23
Keep an eye on: $5 - $51
From $155 for a printer
From $104 to $415 for a computer system
From $0.30 to $10 for keyboards
Blu-ray players: $20+
Speakers: $16 - $78
From $25 to $150 for a tablet
Household Goods, including Furnishings
There are a wide variety of options to consider while shopping for furniture in this area. Possible lack of significance of age. When donating an antique, what should you do? While it may be dated, it still has considerable value. In fact, the antique quality of some pieces may have raised their value. A professional evaluation is required here.
Assuming it is not an antique, condition and aesthetic preference are more relevant than age. Although not yet an antique, a sofa that was popular in 2010 may have little value now. Used linens, for example, don’t usually keep much of their original value.
If not, the following values may be deductible:23
Prices for a twin bed range from $36 to $104.
Prices range from $52 to $176 for a full or king-sized bed.
$3–$25 for a B quilt or blanket
Sofa table: spend $15-$100
Office chair: $45
Clothes chest: $20 - $104
Coffee/end tables: $10-$75
Lighting: $3 - $78
Area Rugs, $2-$93
Cost of a couch: $36 to $395
Cloth Towels: $0.50 - $4
From $10 to $104 for an upholstered chair
Fair market value for home furnishings is often substantially lower than what you paid for them, similar to the case with apparel. And under the IRS’s “good used condition or better” criteria, this list is complete.4
Donating pricey objects is not the time to make educated guesses about their condition or value. None of these items are likely to be included in any charity’s public list of estimated values. Appraisals are typically needed for valuables such as jewelry, artwork, paintings, and antiques.
Donations of more than $5,000 in value should be evaluated.5
B. Make sure to include any copies of appraisals with your tax return.
In the event of a donation of $50,000 or more, the Internal Revenue Service offers an optional Statement of Value for a fee of $7,500 for up to three things and $400 per item thereafter.4
The restrictions are especially complicated with respect to motor vehicles, watercraft, and airplanes. Different regions have different standards, and the charity’s plans for the money could give you a say in how you value the donation. Despite the fact that some commercial enterprises and industry groups issue location-specific criteria, these should not be used in place of a professional analysis.
If the organization sells the vehicle instead of using it, and you’re claiming more than $500 for it, you may be limited to the gross proceeds.6
If you plan to donate an item worth hundreds or thousands of dollars, you should seek the advice of a tax expert.
Donation Reimbursement Procedures You must use the itemized deduction method when filing your tax return for 2022, as well as for the vast majority of other tax years.
Filing Schedule A with your Form 1040 tax return is how you itemize your deductions, which includes charitable contributions.
A tax deduction is only available for donations given to approved charities. The IRS website includes a search function. You can use it to determine if a potential charity or nonprofit is legitimate.
Tax Returns: Choosing Between Itemized and Standard Deductions
If your standard deduction for your filing status is higher than your total eligible itemized deductions, then itemizing may be beneficial to you. To minimize your tax liability, you must choose between the standard deduction and itemizing your deductions.
Donations to charity can be deducted even if taxpayers use the standard deduction, thanks to the Taxpayer Certainty and Disaster Relief Act of 2020. Only cash contributions up to $300 were eligible, or $600 if filing jointly.7
Necessary Supplemental Forms
Any donation of $250 or more must be accompanied by a signed acknowledgment or receipt from the charity.
Many of them also need the submission of Form 8283. Donations above $500 need submitting Section A of Form 8283, while donations over $5,000 require submitting Section B plus an appraisal to support the value.8
If you are claiming more than $500 for household goods or apparel that are not in good, worn condition, you must get an assessment and fill out Section B.6
Questions and Answers (FAQs)
Do you have to pay taxes to the Internal Revenue Service on gifts you receive?
There is no obligation for you to pay the federal gift tax on any gifts you receive. The gift tax is paid by the giver, not the receiver. Remember that this does not apply to donations made to recognized political organizations or approved charities.
What is the procedure of Goodwill’s donation centers?
Items such as clothing, electronics, and home furnishings can be donated to Goodwill. You can drop them off at a local donation facility. Find the area marked for items to be dropped off; an assistant may be there to assist you with unloading. The hours of operation for most Goodwill stores are Monday through Sunday and certain evenings. Find a Goodwill donation center that has a person there to take your stuff so you can get a tax deduction.