Charity begins at home, but should not end there. – Thomas Fuller
In addition to money, many people give ‘stuff’. Used clothing. Outgrown toys. The old couch. As with money, as long as you give it to a qualifying organization, ‘stuff’ can qualify as a charitable contribution and be taken as a deduction on your income taxes.
Many people give their used stuff to Goodwill. I think this is because the folks at Goodwill Industries have gone out of their way to make it easy for us to find them. There are many other organizations that accept donations of stuff. There is one that is very good at sending a truck to pick up, but according to my clients, fairly bad at providing any kind of receipt. Be careful.
The hardest part about giving stuff away (even harder than stuffing it all in the car at once so you don’t have to make 2 trips, or even remembering to go inside the office to get your receipt), is figuring out the stuff’s value. You may have paid $3000 for that couch, but it isn’t worth $3000 in the charity’s resale store. Instead, you are expected to use Fair Market Value. This is basically the realistic possible sale price at the resale store. So, your used $3000 couch and my used $750 couch might both go for $45. Seriously!
How can you find out? Once upon a time, back in the dark ages, a person needed to photograph the couch, then travel around to used furniture spots and photograph similar couches with their price tags, and then do math. Today, you can surf the internet (try: value of used stuff) and come up with numerous lists and pricing schemes. You still might want to keep a picture of your couch to prove it was in excellent condition and worth the amount at the higher end of the scale, and definitely print the valuation guide you use. Yes, kill that tree! If you happen to be audited 18 months later, the site may no longer exist, or it could be updated to different amounts.
Next, you need to make a list of all your items. (“Bag of used clothing” is not a list.) Then, indicate the value of each, and show the total. Write the condition of the items, too. New items count. Items in excellent condition and good condition count. Items in fair condition or poor condition do not count.
If the total of any individual donation of stuff is $250 or more, you absolutely need a receipt. (Example: all the stuff you deliver to the charity on July 15 = 1 individual donation because it all goes on 1 receipt.) If the total of all donated stuff is $500 or more, you have to complete an additional form with your taxes. This is Form 8382, and it will need additional information! How did you acquire the stuff? When? What was the original value? What condition is it in at the time of the donation? You also need to state where and when you are donating it – complete with name, address, and FEIN.
How about new stuff? Like canned food or frozen turkeys? Same. How about those Samaritan’s Purse shoeboxes at Christmas time? Same. Or if you bring donuts and coffee to the church clean-up day? Same. Make a list. Keep receipts. And if any individual donation is $250 or more, you need an acknowledgement letter. That’s a whole lot of donuts and coffee!
And remember: in an audit, without the receipts and the lists, your charitable deduction is likely to be disallowed.
It takes a noble man to plant a seed for a tree that will someday give shade to people he may never meet.
– David E. Trueblood
No one is useless in this world who lightens the burdens of another.
– Charles Dickens