I agree that the donations are supposed to be priced at FMV. For ease, I used Craigslist and eBay, since that way it could try to capture the regional market and what I COULD reasonably have gotten for the items we donated. I did NOT donate any of my nicer items to Goodwill but gave them to nonprofits that could use them–schools, churches, etc. I wanted my nicer items to be enjoyed and appreciated, not shipped to some far-off place or scrapped or adding to landfill.
Well, Goodwill is actually selling stuff for more than 60 cents a pound, is it not?
Have any of you used It’s Deductible? Intuit software, you can load the summary right into Turbotax. It is way easier than trying to find comparable items online for most things. Not that we need to amy more (point of this thread). But if you are still itemizing, I’d suggest you try it.
The amount Goodwill realizes-- not counting anything but the price people pay for the donated goods it sells-- is sixty cents a pound. So yeah, the average sales price of all donated goods is 60 cents a pound. A lot of the stuff realizes 0 cents a pound because it’s unsaleable.
60 cents a pound may be their average, but that’s not what they sell if for in the stores. I can’t take 5 shirts to the counter and say “Oh, this is about 3 pounds, so I’ll give you $3.” There might be a Coach purse that only weighs 3 pounds, but they’re going to charge me $25.
Don’t you remember when Bill and Hillary itemized Bill’s boxers at $2/ea? And that was 20+ years ago.
Because they take a lot of donated stuff, and throw it away, and they take another lot of it and sell it for pennies a pound to third world countries or businesses looking for, essentially, rags. And that is what they’ll do with your stuff too. You can’t assume that what you see in the store is representative of donations. They sort through donations, and most donations do not go to Goodwill stores.
Go ahead and put any valuation you want on your Goodwill donations. I doubt you’ll get audited. Just know that, by definition, the fair market value is what those donations will actually sell for, to people who actually pay money to buy them. And that is sixty cents a pound, on average.
I have often given stuff to my local thrift store (ARC) and since I shop there too, see my own donations for sale in the store. Or stuff just like my stuff. Here the ARC stores most often put the stuff out for sale in the store where it is donated. They do have donation sites around the city too, and I’m not sure how they divide the stuff up. Some stores have more room for furniture, some do appliances while others don’t.
Yes, I’ve used It’s Deductible for years. When I send a bag of clothing to Goodwill, I first open the program, fill in the blanks for what I’m donating and what condition it’s in, then print out the list of what’s included in the bag. When Goodwill gives me a receipt, I attach that to the printed list and use that for backup in case of an audit (which I’ve never had). It gives me a total value for my donation using thrift shop values that comply with IRS guidelines. I love how it transfers all the info directly into Turbo Tax. It’s not just for clothing donations – you can use it for furniture, household goods, donations of stock or money - and it even tracks deductible mileage.
@mathmom #9 - Charitable Contributions are still deductible even if you are hit by the Alternative Minimum Tax.
OP - Get the receipts if you are think you may be close. Anyone who claims charitable contributions starting in 2018 needs to have documentation including a receipt for it. There will be fewer “regular” people whose itemized deductions exceed the standard deduction under the new tax rules - this only applies to those with large mortgage interest, SALT up to 10K, medical expenses, and charitable contributions. So, donations dropped off in the donation box will be excluded. The cash you drop in the church collection plate doesn’t count either. The receipts matter.
I had an interesting conversation with a friend who used to regularly donate a lot to one of the non-profits where I volunteer. He told me that he accelerated some of his charitable contributions and made them in late 2017 instead of 2018. For the rest of 2018, he will not be donating anything else, but in 2019 he plans on making it a “double” year, thus he will be able to itemize.
i’m feeling the same way, OP. Do i keep photographing bags of donation items as we probably wont itemize next year? Do i keep saving receipts? our donations: at goodwill they have 6 weeks to sell at full price; then off to the by=the-pound place. I think intuit is fine for calculating prices; but this is our last year.
We itemize and will continue to based largely on charitable contributions. And I have never deducted donations to Goodwill. You can use their receipts or It’s Deductible or whatever you want, but those valuations will be much higher than what the organization receives for your stuff in most cases. So we do it because it’s a chance to give old stuff a second life, and maybe someone will find something they want or need but couldn’t afford new, but not for the tax deductions.
We did deduct one contribution to a charity rummage sale, but only because we could verify that it sold for over $500.
There is an organization in this area that takes donated cars and gives them to people who need them to get to work. When the time comes to part with the beloved minivan, that’s where it will go. Not Kars 4 Kids, no way no how.
I’ve never deducted the money I dropped in a church plate, either. With no receipt, didn’t feel I could justify it in an audit. (One reason I pledge and then pay my pledge, because I get a receipt for that, and only drop a couple $ in the plate). I don’t think the rules changed on that --but maybe you are saying it is more likely people who itemize will be audited, so be more careful?
@3puppies , I haven’t seen any 2018 changes on receipts, which have been required for some time. Is there something new this year about receipts?
I saved receipts because I live in a state with no income tax. They assign a sales tax deduction amount you can use for that deduction based on income, but if you have a big ticket purchase (like a new car – that would have a 10% state & local tax where I live), your overall sales taxes for the year might be higher than that assigned amount. In that case, you can take the higher actual education. I just saved them in case I had some big purchase and wanted to go that route.
Ditto with medical expenses. I’ve saved the receipts all year in the past. What if I had a serious illness or accident later in the year that ran up my bills? I’d want those receipts then.
Alright, I just looked this up. There previously was an exception to the substantiation rule if the charitable organization receiving the donation filed a return with the IRS. This exception has gone away, so all charitable contributions must get a receipt.
I knew there was something different, but it turns out it is not quite what I thought it was. There previously was a rule allowing charitable organizations to file a report listing the donors and amounts, to save donors the hassle of substantiating their donations. However, since this exception also would have required the charitable organization to get donor SSN information, etc. it was rarely used - it would likely only be meaningful if the donee organization was also getting appraisals, etc. and if the donor had no other contributions. But there were churches who collected this information and filed these returns - especially for parishes that tithe. This was not necessarily uncommon for tithing parishes that accept (or should I say request or demand) direct deposit from parishioners’ paychecks.
The new law upped the limit on charitable contributions from 50% to 60% of AGI (and kept the 5 year carryforward), but they also cut out the college sports team seat license “donations”.
Sorry for the confusion.
I saved ALL relevant receipts for 2017. We remodeled the house (10% sales tax applied to services, too!) and bought an electric tin can on wheels. B-) that is enough to put us way above what TT allocates to our sales tax portion. Did not bother with Goodwill donations… never do.