Can Non-Cash Donations Lower My Income Taxes?

Yes. Assuming you can itemize deductions using Form 1040-Schedule A, non-cash donations are just as valuable as cash donations. Find some time to gather old clothes, kitchen gadgets, sports equipment, and other closet clutter that someone else could use, donate these items to a qualified chjarity, and you can receive a valuable tax deduction.

Come up with $600 worth of used items to give to your favorite charity, for instance, and you can cut your tax bill by $150 if your federal tax rate is 25 percent. Keep good records to document your non-cash contributions. Also note that no deduction is allowed for most contributions of household items or clothing unless the items are in good used condition or better.

Prior to dropping off your clothing and household items to a charity, don’t forget to make a list of what you donate, including each item’s condition and approximate fair market value, and file that list along with your other tax documents. Keep in mind that unless an item is brand new or in excellent condition, it is probably worth no more than one-quarter to one-third of its original cost.

If the value of your non-cash contributions exceeds $500, you must file a special form, IRS Form 8283, to attach with your tax return. Especially large gifts of property worth more than $5,000 require a professional appraisal to determine their fair market value.

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