If you've decided your personal library is getting too large, donating books to a library can not only reduce the clutter in your home, but also reduce your income taxes. Most libraries are qualified charities because they are nonprofit educational institutions. If you have questions as to the library being qualified, search on the Internal Revenue Service's database of charities or talk to a library administrator.
In general, Uncle Sam permits you to write off the fair market value of the books you donate. Of course, there isn't much guidance on what constitutes fair market value in the IRS rules, just that it's the price a willing buyer and seller would agree on. Usually, the fair market value is significantly lower than the original price, so you're better off using thrift stores or second-hand shops to estimate prices than checking Internet retailers to find the price of the book new. However, if you have a book that is worth a lot of money -- say a Hemmingway-signed first edition -- you might need an appraisal.
Records to Keep
With the IRS, no good deed can be claimed on your taxes without the proper records. If your donation is for less than $250, the library needs to give you a receipt showing the library's name, the date and location you donated books and a description of what you donated. Your records should always include a detailed description of what you donated, how much you paid for the books and a fair market value of the books. For donations worth more than $250, the receipt you get has to also include a description of any benefits you received in return for the donation and the value of those benefits because you have to reduce your donation deduction by that amount. If you donated more than $5,000 worth of books, you need an appraiser to verify the fair market value of the donation.
To claim your book donation deduction, or any other itemized deduction, you have to give up your standard deduction. Your standard deduction varies depending on your filing status and the standard changes each year to account for inflation. If your donation isn't very large, unless you have other itemized deduction, such as mortgage interest or other charitable donations, you may be better off taking the standard deduction. For example, if you just donated a few novels you've accumulated while traveling for work, you probably don't have enough to make itemizing save you money.
After you've gotten all your records, report the value of your donation on line 17 of Schedule A. If the value of your donated books is $500 or less, that's all you have to do. However, if you donated more than $500 worth of books, you have to also complete Form 8283. If you donated between $500 and $5,000, you have to complete Section A. If you donated more than $5,000 worth of books, you must complete Section B, including a signature from the appraiser.
- Jupiterimages/Polka Dot/Getty Images
- What Is Needed for Proof of a Home Business for Tax Deductions?
- Tax Deductions Related to Jointly Owned Property by Unmarried Individuals
- Tax Deduction for Temporary Housing Out-Of-State
- Can I Get Penalized for Not Claiming a Second House on Taxes?
- Can I Put My Unreimbursed Partner Business Expenses on Schedule A?
- How to Deduct Depreciation When You Own a Home and Rent a Room
- Tax Laws on Computer Expenses & Deductions
- Is Roof Replacement Tax Deductible?
- Can You Deduct Taxi Rides?
- Tax Deduction for Mileage Due to Voluntary Work