The tax laws say that you can deduct charitable contributions worth up to 60% of your AGI. But special rules do apply, depending on what you donate. The items that are subject to these rules include clothing, household items, cars, boats, airplanes, business inventory, patents, and intellectual property.
How much can I deduct for household items and clothing?
As long as your items are in good, used condition (or better), you can deduct the fair market value of those items on your tax return. If you donate household items or clothing that are not in good used condition or better, you may still take a deduction if the value is estimated to be more than $500, and you include a qualified appraisal with your return.
The fair market value of used clothing and other personal items is usually far less than the price you paid for them. There are no fixed formulas or methods for finding the value of items of clothing. You should claim the price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops.
The fair market value of used household items, such as furniture, appliances, and linens is usually much lower than the price paid when new. In reality, these items may have little or no market value because they are in a worn condition, out of style, or no longer useful. It’s not acceptable to determine the fair market value by using a percentage of the cost to buy a new replacement. Use your best judgment when claiming the true value of your donated household item.
What items can I donate for a tax deduction?
Household items that qualify for a tax deduction include:
- Furniture and furnishings
- Linens (sheets, towels, etc.)
Household items that do not qualify for the deduction include:
- Paintings, antiques, and other art
- Jewelry and gemstones
Can I get a tax deduction if I donate my car?
To receive a deduction for your car or any type of automobile, it must be what the IRS considers a “qualified vehicle.” A qualified vehicle can be a car or any motor vehicle manufactured mainly for use on public streets, roads, and highways; a boat, or an airplane. The amount you can deduct for your donated vehicle depends on its fair market value.
How do I find the fair market value of my car or boat?
To find the fair market value of a donated car, use the price listed in a used car guide for a private party sale, not the dealer retail value. Note that the fair market value may be less if the car has engine trouble, body damage, high mileage, or any type of excessive wear. When using the used car guide, the fair market value is only the same if it is the same make, model, and year, sold in the same area, in the same condition, with the same or similar accessories.
Except for inexpensive small boats, the valuation of boats should be based on an appraisal by a marine surveyor, because physical condition is critical to the value.
If your vehicle donation is worth more than $500
If you donate a qualified vehicle to a qualified organization and you claim a deduction of more than $500, you can deduct the smaller of these:
- The gross proceeds from the sale of the vehicle by the organization, OR
- The vehicle’s fair market value on the date of the contribution. Note that if the fair market value was more than you paid for the vehicle, you can only deduct the amount you paid or the fair market value at the time you purchased the vehicle.
If your vehicle donation is worth $500 or less
If the qualified organization sells the vehicle for $500 or less, you can deduct the smaller of $500, or the vehicle’s fair market value on the date you donated the item.
What records do I need to deduct my donated items?
For your household items and clothing, keep the receipts showing the date and value of your donated goods. For large household items worth more than $500, you will need to include a qualified appraisal with your return.
If you donated a vehicle and its fair market value is at least $250 but not more than $500, you must have a written statement from the qualified organization acknowledging your donation. You might even receive a Form 1098-C Contributions of Motor Vehicles, Boats, and Airplanes. This will show the proceeds from the sale of your vehicle.
How do I deduct charitable donations using TaxSlayer?
When you file your tax return with TaxSlayer, we make it easy to deduct your qualified charitable donations. For specific instructions about how to claim this deduction, see our support article: Can I deduct gifts to charities?