So you've cleaned out your closet, and you have a pile of unwanted clothes you'd rather donate than toss. You've also noticed those bins around town that ask you to fill them up with clothes to be donated to charities. It is possible to deduct these donations on your taxes as long as you plan to itemize. However, you do need to do some homework on the cost of those clothes. If you need a receipt, donating to a clothes drop off box may not be the best idea.
TL;DR (Too Long; Didn't Read)
You can deduct clothing donations without a receipt as long as the value you're claiming is under $250.
Deducting Clothing Donations
You first need to know the fair market value of any clothing you donate, regardless of whether you use a donation drop off box. The IRS recommends using the price someone would pay for the same clothes if they bought them at a thrift store or consignment shop. The organization will not give you this price; it's your responsibility to assign a fair market value to the clothing.
You are expected to retain a receipt to show the IRS for anything $250 and over, and it's not likely you'll get that from an unattended drop-off box. If you have a substantial amount of high-value clothing to donate, take it to an attended collection site. You can get a receipt there, as well as a periodic statement to show every donation you made to that group in the tax year.
Exceptions to the Receipt Requirement
If the clothes you put in clothing collection bins have a value of less than $250, the IRS won't demand a receipt for them on your taxes. You can ask for the deduction without such proof. The IRS does recommend you keep a written record of the donation. Include the organization, date and location, a description of the items and their fair market value. This information will come in handy if you ever get audited.
Not all drop-off boxes are created equal, however. The IRS only allows taxpayers to take deductions for donations made to a "qualified" organization. If you donate to one not on that list, you can feel good about yourself but you won't get a tax break even if you have a receipt. It's up to you to check with the IRS, or the organization itself, for that group's current tax status.
2018 Standard Deduction Changes
For 2018, the standard deduction nearly doubles to $12,000 for individuals and $24,000 for married couples filing jointly. If you've grown accustomed to dropping items in clothing collection bins and itemizing them on your taxes, you may find this doesn't work in 2018. Unless you're dropping $200 worth of clothes into a bin on a regular basis, or you have a boatload of other deductions, the standard deduction will likely override any contributions you could itemize.
Claiming Donations on 2017 Taxes
If you want to claim items you donated to a clothes drop off box on your 2017 taxes, you'll need to itemize your deductions. Itemized deductions are reported on Schedule A on Form 1040, Lines 16-19.
- Internal Revenue Service: Topic 506 - Charitable Contributions
- Internal Revenue Service: Publication 526, Records To Keep
- ClothingDonations.org: General Tax Deduction Guidelines
- IRS: Substantiating Charitable Contributions
- Forbes: 13 Tips For Making Your Charitable Donation Tax-Deductible In 2017
- IRS: New: IRS Announces 2018 Tax Rates, Standard Deductions, Exemption Amounts And More
Mike Parker is a full-time writer, publisher and independent businessman. His background includes a career as an investments broker with such NYSE member firms as Edward Jones & Company, AG Edwards & Sons and Dean Witter. He helped launch DiscoverCard as one of the company's first merchant sales reps.