I want to make a donation to the Good Will, and I am wondering how that gets deducted off my taxes. Like how do they calculate it? For example if I donate $100 worth of stuff. Does that mean I get $100 more back on my return? And who determines the value of what I donate. I think Good Will just estimates $15 a box, but I dont know. Please explain this to me in laymans terms. I want to donate as much stuff as I can so I can get a bigger return. I have my whole garage I want to give, and that is a bunch of stuff so you can see why I am concerned. The Govt takes like thousands out of my hubbies pay checks, and well they dont give much back either so I need help. Plus I would love to help a non profit organization :)
2007-12-13 13:01:43 · 6 answers · asked by WholeSaleRunway.com 2 in Business & Finance ➔ Taxes ➔ United States
A donation of goods does NOT get you a a dollar-for-dollar "credit" on your taxes. II would imagine that you and your hubby will take the standard deduction on your taxes. Let's say this is about $6,000 next year. You will have to itemize more than $6,000 worth of stuff before you realize any benefit to itemizing. That $6,000, just generally, can be made up of donated stuff, un-reimbursed business and medical expenses, etc. It is not worth itemizing unless you can surpass the standard deduction. Then, if/when you surpass it, what you actually is a reduction in your taxes at the percent you are taxed at... That is, say you're in the 35% tax bracket. If you donate an additional $100 in stuff, you'll see a deduction in your taxes of $35.00.
The theory behind the standard deduction is that $6,000 or whatever is the average amount married couples donate, spend on un-reimbursed medical and work-related expenses, etc. So you DO sort of get a deduction even if you don't itemize.
Bottom line - for most people, if you want to donate, do it for the altruistic reasons, because it's hard to actually see any financial gain from it.
Oh, and you'll want to get a receipt from Goodwill. And you can only deduct at the value the stuff can realistically re-sell for. If the stuff is damaged or broken, chipped, etc. in any way, you really can't take any deduction for it.
2007-12-13 13:16:23 · answer #1 · answered by anna13 4 · 1⤊ 0⤋
You should estimate the fair market value of the goods you donate. You should have a list of everything you donate. You report the donation on Schedule A if you itemize deductions. If the donation exceeds $500 you have to attach Form 8283 where you describe what you donated. If you don't itemize the deductions your donation will have no effect on your taxes.
A donation of $100 does not mean that your tax refund will be $100 bigger. The donation will reduce your tax by the amount of your tax rate. If your tax rate is 25 percent, a $100 donation will reduce your income tax by $25.
2007-12-13 13:19:15 · answer #2 · answered by Anonymous · 0⤊ 0⤋
First of all, you can only take a charitable deduction if you itemize.
The deduction is the fair market value of the items in their current used condition - for Goodwill, what they'd sell them for in their stores. Their website has a list of items and price ranges. You have to have an itemized list of what you donated, not just something like "6 boxes of used clothing".
And you don't get back the total amount. It's a deduction from your income before your taxes are calculated. So if you itemize, if you're in a 15% bracket and you donate $100 worth of items, your tax savings would be $15.
2007-12-13 13:14:26 · answer #3 · answered by Judy 7 · 2⤊ 0⤋
No, a donation is in basic terms deductible interior the three hundred and sixty 5 days while that is made. the only exception is that in case you donate lots in a three hundred and sixty 5 days which you exceed the optimal deductible volume for the three hundred and sixty 5 days, then the surplus could be carried over to the subsequent 3 hundred and sixty 5 days. The SA people supply you a receipt for what you donate, yet won't placed expenses on it.
2016-12-17 17:31:09 · answer #4 · answered by ? 4 · 0⤊ 0⤋
If you donate to a registered charity (Goodwill is one) you may take a deduction IF you itemize your deductions. That will reduce your taxable income. The amount it reduces your tax depends upon your marginal tax rate. If your marginal rate is 15%, your tax savings is $15.
However, it is not worth itemizing unless your total itemized deductions exceed your standard deduction amount. If you are single, your standard deduction is $5,350 for 2007. If your donation is your only itemized deduction it would not make sense to itemize as you'd actually pay MORE tax if you did.
2007-12-13 13:15:19 · answer #5 · answered by Bostonian In MO 7 · 3⤊ 0⤋
what if you are not working and you donate and get receipt for 500 dollars how will that be calculated
2013-12-08 02:57:41 · answer #6 · answered by Barbara 1 · 0⤊ 0⤋