What’s My Goodwill and S.A. Donation Worth? + FAQs

Lana Dolyna, EA, CTC
Lana Dolyna, EA, CTC

Senior Tax Advisor

When donating items to charity like Goodwill or Salvation Army, you should consider whether you will benefit from making a donation or selling the item yourself. Donations made to non-profit organizations can be included in your itemized deductions if you are itemizing on your return. Donations of items should be valued at their fair market value when calculating the deduction on your tax return.

Determining a Donated Item’s Fair Market Value

When you donate property to a qualified tax-exempt organization, you may be eligible to take a tax deduction for the item’s fair market value. Fair market value is generally defined as the price that would be paid for the property by a willing buyer in its current condition. However, determining the fair market value of a donated item can sometimes be tricky.

Take a close look at the item itself. Consider its features, condition, and any special circumstances that may affect its value. For example, an antique vase may be worth more than a standard vase due to its age and rarity.

Do some research to find out what similar items have sold for in the past. Check online auction sites, classified ads, and specialty retailers to get an idea of the going rate for your item.

Use your best judgment to come up with a fair market value for the item. Remember, the key is to find a price that would be acceptable to both a willing buyer and seller. With these tips in mind, you should be able to determine a reasonable, fair market value for your donated item.

Children's Clothing

Household Goods

Men's Clothing

Miscellaneous

Women's Clothing

Donating Furniture and Other Household Items

When you’re ready to get rid of some old furniture or other household items, you may wonder if donating them is worth the hassle. The answer is that it depends. You may be able to help out a good cause and get a tax deduction for your donation.

There are a few things you need to keep in mind when making a donation. Most importantly, it would help if you made sure that the organization you’re donating to is tax-exempt. Otherwise, your donation won’t be tax-deductible.

Double check that the item you’re donating is in good condition. Most organizations won’t want items that are damaged or in poor condition. You should also make sure to get a receipt from the organization for your donation. This will be important when it comes time to claim your tax deduction.

Big-Ticket Donations

In the United States, the term is often used to refer to items that are tax-deductible, such as cars, stocks, and jewelry. To include a big-ticket item (other than stocks or vehicles) on your tax return that is valued at over $5,000, you will need to get an appraisal done by the recipient charity.

Vehicles donated to charity are valued at the value that they are resold for. The charity will provide documentation which includes the final sale price of the vehicle.

Stocks are valued at the average of the high and low of the day that the stocks are donated. Charities should provide a receipt for the number of shares that were donated to the organization and the date of the donation.

How to Claim Donations on Your Tax Return

Donating the item is only the first step to receiving your tax deduction. Once you’ve donated, you’ll need to claim the deduction on your tax return.

Itemizing Vs. Claiming the Standard Deduction

According to the tax policy institute, approximately 30% of taxpayers itemize their deductions each year. To determine whether you should itemize or not, you should add up all your potential itemized deductions,, including state and local taxes, mortgage interest, and donations, to determine if they are more than the standard deduction for your filing status.

When calculating your total deduction, keep in mind that most deductions are limited in some way. State and local taxes are capped at $10,000 each year and mortgage interest is limited to the interest paid on the first $750,000 of your mortgage balance (unless your mortgage is grandfathered into the previous, higher limit).

If you determine that itemizing your deduction is beneficial, then you should gather your tax documents and receipts to calculate your total deductions. Your total itemized deductions are declared on Schedule A of your individual tax return.

Additional Forms You May Need

Though you do not turn in your receipts with your tax return, you will want to make sure that you have your deduction receipts on hand in case of an audit.

For itemizes valued at over $5,000 or vehicles (even if less than $5,000), you will need an appraisal provided by the organization that received that donation.

FAQs

Here are the answers to some common questions about the value of your donations.

The appropriate level of donation will depend on your financial situation and whether or not you are itemizing on your tax return.

The IRS considers a large donation as over $5,000 and requires additional documentation if you include such a donation on your return.

As of 2021, the average American donates $574 to charity each year.

Each bag of clothing is unique and should be valued at the fair market value of the clothes in the bag. Generally speaking, your can deduct $15-$45 for a bag of clothes.

No, you are not taxed on donations received, unless they are received in the course of business.