Want to make a difference in the world?
Yeah, Annie, I would love to. But I don’t have time. And right now, I am so broke that I can’t afford to pay attention!
Trust me, I get it. Money isn’t always an option to give, especially since us single girls only have our income. Have you ever thought about in-kind (non-monetary) donations?
I want to give you some tips for giving in-kind donations to make your donation go further and get yourself a tax write-off.
In-kind donations can take lots of different forms such as:
- A silent auction item for a nonprofit
- A bridesmaids dress for lower-income girls to have as prom dresses
- Housewares for domestic violence survivors to set up their own apartment
- Furniture for nonprofits that provide housing for refugees
- Business clothes for women to wear on interviews
- Gently used clothing for thrift shops who reinvest their earnings into community programs
Not only are these donations fantastic gifts for the nonprofits and those they serve, but it saves items from being thrown away. Clothes get a second life, and old appliances or furniture help set up new households.
There are tax benefits to in-kind donations. According to IRS.gov, here is what you need to do:
- Make sure your donation is to a fully qualified 501(c)3. You cannot claim deductions to your church’s thrift store if it doesn’t have its own nonprofit tax ID number.
- Make absolutely sure you have the proper documentation from the nonprofit about your donation. Any donation above $250 must have the charity’s name, the date, and the description and value of the donation. It’s a good idea to do this for any in-kind gift. Any 501(c)3 worth its salt will happily provide this paperwork upon request.
- You cannot take a deduction for clothing unless it is in good used condition or better.
- If you donate more than $500 worth of goods, you need to attach IRS form 8283, Section B to your income tax return.
- Certain items are subject to professional appraisals to determine value. Click the link above for more information.
- Always ask your tax professional any specific items. I am not a tax professional, and I gave up doing my own taxes a long time ago!
Note: While volunteer time and donated services (teaching a class, helping people prepare tax forms) are exceedingly generous, they are not tax-deductible. The IRS states that only tangible goods can be deducted from taxable income.
Now, to be honest, I don’t get documentation for every donation I make. I ruthlessly purged my closet about three years ago and had three trash bags full of clothes to give to a women’s shelter in my hometown. I didn’t have the time or the interest to categorize every item, let alone bother the shelter for a donation letter. But it was hundreds of dollars worth of clothing I could have written off.
I advocate giving because you really want to—not because you want a tax write-off. Don’t feel like you have to do all the paperwork if you just want to give items away. Do what works best for you. If you don’t have the time or energy to gather receipts or donation acknowledgments, there’s nothing wrong with that. The fact you are giving trumps everything else!
Whether you are helping a women just out of prison furnish her first apartment or adopting a family for Christmas, giving in-kind donations can have a powerful impact that lasts long after you’ve paid the bill. With a little creativity, you can give your unwanted possessions a second life. With a little extra paperwork, you can benefit from the tax deductions in the IRS code.
What do you have in your home that you would love most to give as an in-kind donation? Comment below!