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Get a Bigger Tax Deduction for Donated Clothing

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That clothing packed away in your attic could be worth hundreds or even thousands of dollars in tax deductions, much more than it would bring at a garage sale. Simply donate the clothes to a charity, such as Goodwill Industries or the Salvation Army.

According to IRS rules, you are allowed to deduct the “fair market value” of clothing — the amount that it would sell for in a thrift or consignment store. Trouble is, most taxpayers assign lower values to their donated clothing — and pay higher taxes as a result.

Below is a sampling of fair-market values of common used clothes based on nationwide thrift and consignment store prices. You also can find fair-market values at charity Web sites, including www.goodwill.org and www.salvationarmyusa.org. When donating your clothes, write up a list of all the items, with fair-market value assigned to each one. Get your list signed and dated by the charity.

Important rules: You must file Form 8283, Noncash Charitable Contributions, with your taxes if you claim property donations of more than $500 in a year. An independent appraisal is required if your noncash donations total more than $5,000. Your charitable-contribution deductions cannot exceed 50% of your Adjusted Gross Income (AGI) in any year. If they do, the excess can be applied to future tax years.

CLOTHING CONDITION
LIKE NEW GOOD
MEN
Two-piece suit $51 $41
Sport coat $20 $18
Long-sleeve dress shirt $16 $11
Blue jeans $15 $10
Silk tie $10 $8
WOMEN
Two-piece suit $40 $26
Long-sleeve dress shirt $14.50 $10.50
Casual dress $22 $13.50
Blue jeans $16 $10
Leather dress shoes $20 $11
CHILDREN BOYS GIRLS BOYS GIRLS
Long-sleeve pullover sweater $7 $9.50 $5 $7.50
Long-sleeve casual shirt $6 $8.50 $4 $6.50
T-shirt $4 $2.50 $2 $1.50
Blue jeans $8 $11.50 $5 $9.50
Dress shoes $8 $10 $5.50 $7.50
Bottom Line/Personal interviewed William R. Lewis, CPA, CFP, an accountant in Lincoln, Nebraska, with more than 30 years of experience. He is author of Money for Your Used Clothing, a booklet published annually since 1990, featuring up-to-date used-clothing valuations for tax purposes (Certified Used Clothing Values, Inc.). His Web site is www.mfyuc.com
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Source:
Bottom Line/Personal interviewed William R. Lewis, CPA, CFP, an accountant in Lincoln, Nebraska, with more than 30 years of experience. He is author of Money for Your Used Clothing, a booklet published annually since 1990, featuring up-to-date used-clothing valuations for tax purposes (Certified Used Clothing Values, Inc.). His Web site is www.mfyuc.com
Date: November 15, 2008 Publication: Bottom Line Personal
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