Q:

How do you calculate a tax deduction for donations to Goodwill?

A:

Quick Answer

To calculate tax deductions for donations to qualified charitable organizations such as Goodwill, estimate the fair market value of the goods you are donating, reports the Internal Revenue Service. To be eligible for deductions, clothing, household goods and other items must be in good condition. Obtain a written document from Goodwill containing the date and amount of the donation.

Continue Reading

Full Answer

To estimate the fair market value of your contribution, make a detailed list of the items and their condition, including estimates of when you obtained them and the original purchase prices, advises Bankrate. If possible, take photos or videos of your donations, and file them with your tax records. A reasonable guideline when estimating fair market value of good-quality items is 25 percent of the original price. The maximum tax deduction you can claim for charitable contributions annually is 50 percent of your adjusted gross income. If your contribution exceeds $5,000 in value, you must have a qualified appraiser value it and submit the appraisal summary with your tax return.

To assist you in evaluating your donations, the website Goodwill.org has an online donation valuation guide, explains Goodwill Industries International. As of 2015, Goodwill also partners with the paid service CharityDeductions.com, which offers an initial free promotion and discount for continuing membership in a service that assists contributors who give substantial amounts to Goodwill in evaluating their donations for tax purposes.

Learn more about Income Tax

Related Questions

Explore