If you donate clothing using a drop box, you may have a hard time claiming a tax deduction. Here’s why.
Clothing donations are generally eligible for a tax deduction under the charitable contribution deduction rules.
You’re usually able to deduct the fair market value of your clothing. Unless you’re donating brand new items with the tags still on them, the fair market value of used clothing is usually far less than your original purchase price.
Most major charities that accept clothing donations have guides with the estimated value of specific clothing items.
To qualify for a tax deduction, the clothes generally need to be in good, wearable condition. Donations for recycling or to be used as rags for shelter animals generally aren’t deductible.
When you donate clothes to a clothing drop box, there are two things you need to watch out for.
First, the drop box needs to be run by a qualifying non-profit organization. Some drop boxes are run by organizations who didn’t go through the IRS 501(c)(3) approval process. Some are even run by for-profit organizations that sell the clothes.
Second, you usually need to get a receipt for your donations. If you donate clothes worth less than $250 per year, you may be able to claim a deduction without a receipt if you keep written records showing who you donated to, what you donated, and how you determined what the clothes were worth.
If you donate more and don’t get a receipt, you won’t be able to claim more than $250.
Claiming Your Donation
Clothing donations are an itemized tax deduction under charitable contributions. When you file your tax return, it will ask you for your donation amounts.
Your receipts and other records are generally just in case the IRS randomly audits you, so save them for at least six years. In some cases, if you make very large donations, the tax forms may ask for additional information.
If you use the standard deduction, there’s no way to claim clothing donations or other charitable contributions. The standard deduction replaces a wide range of deductions including charitable donations.