Goodwill Donations Value

From LoveToKnow Charity

Many people who choose to donate items to Goodwill stores often neglect to determine their Goodwill donations' value. Understanding the fair market value of the various donations you provide to Goodwill can provide you with a significant tax break when tax time comes around.

How to Value a Charitable Donation

Determining Goodwill Donations Value

Goodwill is an amazing enterprise that seeks to help people with disabilities to obtain employment through training programs and other forms of assistance. Communities can realize significant benefits from the work that Goodwill supports. Considering that Goodwill pledges 84% of all revenues go toward those programs, Goodwill is one of the best organizations in the country to provide donations. Also, your donations can take many forms. While most people consider donating items to goodwill, you can also donate in the following ways:

Donating vehicles
Business donations
Donating money
Donating household items
Donate your time

What Items to Avoid Donating

Goodwill accepts a large variety of household goods. While it's not recommended to use Goodwill as an alternative to throwing very old and used items away at the dump, if items are only gently used and in excellent condition, then Goodwill is the place those items should go - not in a landfill. Goodwill is generally very accommodating when it comes to items they will accept, however every charitable organization that takes donations from the public needs to draw the line on certain items, or they will become burdened by unnecessary disposal expenses. For this reason, most Goodwill stores across the country cannot accept the following items.

Chemical products like paint, pesticides, or cleaning fluids
Hazardous waste like fuels, oil, or batteries
Televisions (they contain hazardous waste)
Large Appliances like stoves, refrigerators, or air conditioners
Mattresses or box springs
Carpeting
Building materials
Empty bottles or cans
Weapons or ammunition

In addition, many Goodwill stores are overrun with people donating child supplies like cribs, car seats and toys. Only donate these items if they are in very good condition and you know for certain that they meet all of the U.S. Consumer Product Safety Commission's safety standards.

Determining the Value of Donated Items

Each category of donations has different methods of calculating value. Obviously, if you are contributing a business or a personal financial donation, the value of the donation is equivalent to the dollar value of your donation. However, goods and services are calculated based on fair market value.

Donating a Car

When you donate a car to Goodwill, much depends on the requirements of your local organization. Some Goodwill organizations will accept any car, whether it's working or not. Others require that the car be in running condition. Once you donate the car, you'll sign the title over directly to the organization, or whoever is officially represents the organization in your area. Always make sure never to leave the title blank, fill it out when you donate the vehicle.

As of January 1, 2005, the IRS defined the value of your vehicle donation as being equivalent to the proceeds that the organization receives when the car sells. In order to claim the charity donation on your taxes, you'll need acknowledgement in writing from the local Goodwill that states the sale price of the car. Within thirty days of donating your vehicle, make sure to obtain either the sale price in writing, or acknowledgement that the car is going to be used by the charity for some other purpose. If Goodwill plans to use the vehicle, you can determine fair market value of the car based on the price other similar cars in your local area are selling for. Check local newspaper classified listings for the model and year of the car you've donated for the exact dollar amount. Additionally, your tax advisor will be able to help you determine the fair market value for your car.

Donating Household Items

Sometimes it can feel overwhelming to determine "fair market value" of a box full of items that you just want to get rid of. However, taking the time to do an inventory before you bring the items over to the store can save a great deal on your taxes in the form of charitable contributions. Again, a tax advisor can help you determine the fair market value of your list of items, or you can refer to IRS Publication 561 entitled "Determining the Value of Donated Property."

Goodwill International provides a very helpful document to assist donors with valuing their own items. Print this list and bring it to your tax advisor when you do your taxes. The list will help with at least a good ballpark estimate for each of the items on your list, which the advisor can refine based on local market conditions. A few examples of estimated market value for some common items include:

Women's Skirts: $2-12
Men's Jeans: $4-21
Men's Boots: $6-18
CDs and DVDs: $2-5
Coffee Maker: $4-15
Computer System: $100-400
Sofa: $30-150
Kitchen/dinette set: $40-100

Also keep in mind that if you are donating a lot of items, and the value reaches over $500, you'll need to fill out a special IRS form called Form 8283 (Noncash Charitable Contributions.) For this form, you'll need to include Goodwill's Federal Identification number, so when you donate the items, make sure to ask the store for their FID number.