Tax Donation Value Guide for Clothing

by Kevin Johnston

When you donate clothing to charity, you can deduct the value of the donation from your taxable income for the year in which you made the donation. However, you do not get to deduct the full retail value of the clothing. You can only deduct the fair market value. You may need several types of documentation to support your claim if the Internal Revenue Service questions your appraisal of the clothing you donate.

Ranges

According to the Salvation Army, you should work with a range of prices, from low to high for each type of item. For example, a woman’s blouse can range from $2.50 to $12, depending on the condition of the item. Shoes can range in value from $2 to $25. Even if you donate to a charity other than the Salvation Army, you can use the guidelines this organization offers online as a basis for your estimates of clothing value.

Replacement Cost

The Internal Revenue Service does not accept replacement cost as a basis for valuing donated clothing. In fact, it says that donated clothing may have little or no value at all. Because of this IRS guideline, you should value donated clothing toward the low end of the ranges provided by charities, unless the item is of exceptional quality and desirability, and is in excellent condition.

Appraisals

The IRS requires you to provide an appraisal for items that you value at more than $500. This appraisal must come from a qualified appraiser.

Documentation

Photographs, canceled checks, receipts for the purchase of an item, and magazine or newspaper articles that feature the item are all acceptable documentation to prove the value of donated clothing. Do not attach this documentation to your tax return. Instead, keep it on file in case the IRS questions your valuation of the clothing.

Charity Receipts

Many charities will provide you with a receipt at the time of your donation. The charity will not value the items on the receipt, but you do have a record of the donation. You can add the donated value of the items on that receipt.

About the Author

Kevin Johnston writes for Ameriprise Financial, the Rutgers University MBA Program and Evan Carmichael. He has written about business, marketing, finance, sales and investing for publications such as "The New York Daily News," "Business Age" and "Nation's Business." He is an instructional designer with credits for companies such as ADP, Standard and Poor's and Bank of America.

Photo Credits

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