Have your kids outgrown last year’s school clothes? Are they clamoring for the latest backpacks and school supplies? If so, you’ve probably been shopping for back to school clothes and supplies in recent weeks. Which may leave you wondering what you should do with the gear they’ve outgrown?
You may be tempted to simply toss the clothes into the trash or dump them into the nearest collection bin, but if you do, you may be missing out on a valuable tax deduction. That’s because you can deduct usable clothes and gear that you donate to a charity and help someone in need. Here’s what you need to know before you do.
Only donations to qualified charitable organizations count. If you give your old gear to your household help or a friend, that doesn’t qualify. Donations to religious institutions and known charity organizations are probably your best bet, and if you aren’t sure if your donations are going to a recognized qualified charitable organization, use the IRS Exempt Organization Select Check tool.
Additionally, you can only take a charitable deduction for the value of clothes and gear in good condition at the time you donate them, not the original cost or replacement value. TurboTax ItsDeductible helps you accurately track and value your donations year round and can transfer your information to your tax return at tax-time.
If your donations are worth over $250, you’ll need to get and keep a statement from the charity that shows a description of the items. Form 8283 needs to be included with your tax return if your non-cash donations are more than $500, and if your donation is worth over $5,000, you will need to get a certified appraisal.
There’s no need to know about the tax form that needs to be filled out. TurboTax will ask you simple questions about your donations and will automatically include the information on the correct tax form based on your answers.