Many people donating items to Goodwill often neglect to determine their donations' value. Understanding the fair market value of your donations is essential for deducting them on your tax return.
Determining A Donations' Value
The Internal Revenue Service (IRS) determines the value of any donations to a charitable organization. Monetary donations are valued at their exact amount. The value of other donations, regardless of their recipient, is not its cost or depreciated value. Instead, it is the fair market value of the item at the time it is donated. This refers to the amount a buyer would pay for the item and a seller would ask for it. This valuation guideline applies to any clothing, household or other tangible items you donate. An item in such a bad state when donated that is unable to be purchased to sold is not ascribed any value. IRS Publication 561 entitled "Determining the Value of Donated Property" contains guidelines for determining the value of donated property. You can only deduct the fair market value of your donations on your taxes.
Goodwill provides a general listing of the value of donated items. This list is not exhaustive and should not be relied upon to tell you the specific values of items in accordance with the IRS' rules. Follow the IRS guidelines for specific values.
General Values of Household Items
Although their specific value depends on their condition and the area in which they are donated, tangible items have general values. The values below are based on Goodwill's guidelines:
- Women's Skirts: $3.99
- Jeans: $4.99
- Dress: $4.99
- Winter Coats: $12.99
- Curtains: $2.99
- Towels: $1.99
- Pillows: $2.99
- Tables: $39.99
- Chair: $6.99 (each)
- Desk: $24.99
- Microwave: $6.99
- Standard Computer Monitor: $20.00
- Computer Hard-Drive: $25.00
- Keyboard: $10.00
Donating a Car
When you donate a car to Goodwill, its value is determined according to the requirements of your local organization. Some Goodwill organizations accept any car, whether it runs or not. Others require that it run. Once you donate the car, you give title to it to the organization. Never leave the title blank or you may be prevented from deducting it on your taxes.
As of January 1, 2005, the IRS defined the value of your vehicle donation as being equivalent to the proceeds that the organization receives when the car sells. In order to claim the charity donation on your taxes, you'll need acknowledgement in writing from the local Goodwill stating the sale price of the car. Make sure to obtain either the sale price or a statement that the car is being used by the charity within 30 days of your donation.
If Goodwill plans to use the vehicle, you can determine the fair market value of it based on the price of similar cars in your area. Local newspaper classified listings for the model and year of the car you've donated will provide you with a general dollar amount.
Valuing Your Donations
It might feel overwhelming to determine "fair market value" of a box full of items, but taking the time to make an inventory list before donating can save you a great deal of money on your taxes. If you are donate a large amount of items and believe that its value exceeds $5,000, you'll need to complete IRS Form 8283, titled "Noncash Charitable Contributions". For this form, you'll need to include Goodwill's Federal Identification number, which should be listed on your donation receipt.
