Guide to Making Donations

Come the yearly ritual of cleaning out the closet or a bedroom, it is all too easy to fill bags and bags of unwanted items that range from clothing to appliances. Many people however, are unaware that the government has begun to crack down on the condition of these so-called donations if you want to receive a tax break.

Effective August 17, items such as clothing, furniture or appliances had to have been in good condition if you want to receive a tax deduction this year. Good condition would be defined as something that can actually be reused. Use your best judgment. If you cannot see yourself giving the item to a family member or friend for their own use, then it probably isn't good enough to qualify as a donation.

Take for example clothing, if there are holes in the item and the seams are ripped and cannot be fixed, this would be an unacceptable item to donate.

When gathering your donation items it is a good idea to keep a record of what you are giving away. Some people even suggest going as far as snapping a picture of these items as record of their condition should you later be subject to auditing by the IRS.

With digital cameras and camera phones a norm these days, it should not be too difficult to take pictures of these items and them store them away for safe keeping.

In addition, it is a good idea to record exactly what you are giving away along with their estimated worth. If you are unsure of how to price something, you can visit the Salvation Army's web site or visit a thrift store to see how similar items are priced.

When assessing the value of something, think about the item this way: if the item was being sold at a garage sale, what price would you be willing to pay for the item? It certainly would not be the retail price, so do not even think of claiming that price when doing your taxes.

For donations that are between $250 and $500, an individual will need a signed receipt for their items. When dropping items off to a place like the Salvation Army, the attendants normally give out signed receipts with no problem.