A clothing donation receipt is the written documentation of a clothing donation to a charitable organization. It is essential for clothing donors to track what clothing articles they donated to which organizations on what dates. This receipt is vital if the donor plans to claim a donation exemption on their tax return for the relevant calendar year.
Table of Contents
- What Goes Into a Clothing Donation Receipt?
- Are Clothing Donations Tax Deductible?
- How to Donate Clothes
- Resources
What Goes Into a Clothing Donation Receipt?
Clothing donation receipts, also known as written acknowledgments for clothing donations, always need to include the following information:
- Charity’s name, address, and Tax ID;
- Donation date;
- Donation’s total value;
- Donor’s name and address;
- Itemized list of clothing articles with detailed physical descriptions and estimated values; and
- Signature of a representative from the charitable organization receiving the donation (this confirms that the organization agrees with the estimated values).
All that said, there are different rules for the contents of donation receipts that depend on total donation values:
- For donations valued less than $250: The IRS only requires a written statement from the charitable organization, including the charity’s name, the donation date, and the fair market value of the donation.
- For donations valued between $250 and $500: The IRS requires a standard written acknowledgment from the charitable organization described above.
- For donations valued between $500 and $5,000: The IRS requires the donor to file an additional form with their tax return: Form 8283, “Noncash Charitable Contributions.”
- For donations valued over $5,000: The IRS requires the donor to file Form 8283 and a written appraisal of the donated item from a qualified appraiser.
Are Clothing Donations Tax Deductible?
Clothing is one of the top three most commonly donated properties in the U.S. (along with vehicles and household items). A clothing donation is only tax deductible if made to a qualified 501(c)(3) tax-exempt organization.
An organization is “qualified” if it identifies as:
- Charitable;
- Cruelty prevention for children/animals;
- Educational;
- Literary;
- Religious; or
- Scientific.
The following types of organizations are not “qualified” 501(c)(3) tax-exempt:
- Chambers of commerce;
- Civic leagues;
- Labor unions;
- Political candidates;
- Political organizations;
- Social clubs; and
- Sports clubs.
The IRS offers the Tax Exempt Organization Search tool to confirm the tax-exempt status of a charitable organization.
Determining the Deduction Value of a Clothing Donation
The IRS offers deductions for clothing based on each item’s fair market value (the value it would be sold in the general marketplace in its current condition). Donated clothing has to be in good condition or better to have a tax-deductible fair market value. While some charitable organizations create valuation guides for their donors, this is not always the case.
The following information can help clothing donors determine the fair market values of their donated clothing items:
- Cost of replacing a damaged or lost version of the article;
- Expert opinions;
- Prices of comparable items in thrift stores, used clothing stores, and auction sites; and
- Selling price of an item (if unused).
What if a Clothing Item is Too Damaged to Donate?
Sometimes a clothing item isn’t in good enough condition to receive a tax deduction. Donating damaged clothing and textiles is crucial because many charitable organizations re-sell unsold items to clothing recyclers. These recyclers can prevent up to 95% of textile “trash” from ending up in landfills:
- 45% is reused and repurposed;
- 30% is recycled and converted;
- 20% is recycled into fiber; and
- 5% ends up as waste.
How to Donate Clothes
Step 1: Gather Clothes for Donating
Only functional clothing is tax-deductible. If an organization determines a donation is not re-sellable, the IRS won’t deduct the value of that donated item on a tax return. The article can, however, be recycled.
Step 2: Find a Donation Center
Many types of charitable organizations accept clothing donations, including but not limited to:
- Churches;
- Family shelters;
- Food pantries;
- Homeless shelters;
- Local charities;
- Nonprofit thrift stores;
- Orphanages;
- Veterans charities; and
- Women’s shelters.
Step 3: Deliver the Donation
It’s always wise to make clothing donations in person. This way, the donor can request the donation receipt in person. The donor and organization can sort through the donation items to ensure both parties agree on the final estimated values.
Step 4: Save the Receipt
The only way for a donor to claim a deduction on clothing is to provide a proper clothing donation receipt with their tax return.