One of the benefits of donating used clothing (besides that warm, fuzzy feeling) is that
you can receive a tax deduction. Here’s how.
Keep a specific list
of what you are giving away (four pairs of shoes, three suits, eight shirts, etc.) to ensure that you’re accurately representing what you’ve donated.
Figure out what the clothing you’re donating is worth. Unfortunately, the charity is not permitted by the IRS to assign value to your clothing you do that. So how do you know what those purple pumps are worth? “The fair market value for clothing is the price that you would get if
you sold the item to a buyer, such as a resale shop,” says Randy Crabtree, CPA, a tax accountant in Palatine, Illinois. For a general listing of the fair market value of your clothes, check out www.goodwillpromo.org or www.salvationarmyusa.org.
Get a receipt. Donation centers will generally give you a receipt on the spot, but if you are mailing your clothes to a charity, check its policy, and also send a self-addressed, stamped envelope so it can send you a receipt. The cost of shipping is tax-deductible, so hang on to those receipts too.