Making clothing donations is a smart way to trim your tax bill, as you can deduct your clothing donations from your taxes. You must be truthful and honest when calculating how much you will deduct. Due to past transgressions, there are strict laws to help you determine the value of your items so that you can deduct an amount that is fair to both you and the IRS.

Limits

You may donate up to a total of $500 of clothing and household goods to charities without question, though you should have a signed receipt. Should you get audited and not have a receipt, you will lose your deduction. You must complete Section A of Form 8283 Non-Cash Charitable Contributions and file it with your tax return if you donate more than $500 worth. To claim a tax deduction for any single item with a value of over $500, you need a qualified appraisal to put with your tax records.

Condition of Items

The law dictates that all clothing and household items given to charities be in good condition or better. You may no longer donate questionable items that you no longer use because they are damaged or worn out. You should throw away damaged and worn items when you are sorting your deductions.

Determining Value

You cannot arbitrarily assign a value of $200 to an old pair of designer jeans. You may only claim the fair market value of the item. Fair market value is the amount that the item would sell for in a second hand market such as on eBay or in a consignment shop. It is your responsibility to determine the value of your donated items by researching the value of each item. Some charities have a valuation guide with a minimum and maximum price suggestion that you can use.

Source:

ClothingDonations: Household Goods Donation Guidelines

BankRate: Tax Valuation Guide

Resource:

Salvation Army: Donation Value Guide

IRS: Form 8283