Donating to Goodwill, the Salvation Army, or your favorite charity can be a great way to give back and reduce your tax bill. However, you could be denied if you don’t follow IRS rules to take a charitable contribution deduction.
Are you getting ready to hit the road to be a digital nomad or RVer? You might be cleaning out the house, including having yard sales, giving stuff to friends and family, etc. and then donating whatever is left over.
News flash: the IRS has strict rules to take a charitable contribution deduction; if you don’t follow them, you might lose your deduction. No one wants to lose out on a deduction, right?!?!
Just ask Mr. Bass, a taxpayer who donated clothing and household items to charity. He itemized his deductions and filled out IRS Form 8283 but failed to meet all the documentation requirements. The Tax Court denied his entire deduction, even though the donation was real. Why? Because he didn’t group similar items (like clothing) for appraisal purposes, and lacked the necessary valuation documents.
The good news? You can avoid Mr. Bass’s mistake and confidently claim your deduction by following these three simple steps.
1. Know That Charitable Donations Are Itemized Deductions
Before you begin tracking receipts or listing donated items, make sure itemizing is worthwhile for your situation. Charitable contributions can only be deducted if you choose to itemize deductions on your federal tax return, meaning you skip the standard deduction and list all your deductible expenses on Schedule A.
The standard deduction amounts for 2025 are:
- $15,000 for single taxpayers
- $30,00 for married couples filing jointly
- $22,500 for head of household
If your total itemized deductions—including things like mortgage interest, state and local taxes, medical expenses, and charitable gifts—don’t exceed these amounts, you won’t benefit from itemizing. But if they do exceed these amounts, charitable giving can help reduce your taxable income even further.
It’s also worth noting that only donations to qualified 501(c)(3) organizations are deductible. Gifts to individuals or crowdfunding campaigns like GoFundMe don’t count.
2. Group Similar Items and Follow Documentation Rules
Documentation becomes essential if you’re donating non-cash items, like clothing, electronics, or furniture. The IRS requires you to group similar items together (e.g., all clothing or all electronics) and determine their fair market value at the time of donation.
Here’s what the IRS expects, based on the total value of your non-cash donations:
| Donation Amount | Requirements |
|---|---|
| Under $250 | Keep a receipt showing the organization, date, and description |
| $250 – $500 | Get a written acknowledgment from the charity, including value and a statement of any goods/services received |
| $501 – $5,000 | Complete IRS Form 8283, Part A; provide details like condition, date acquired, and original cost |
| Over $5,000 | Attach a qualified written appraisal and complete Form 8283, Part B, signed by both the appraiser and the charity |
This is where Mr. Bass got tripped up. He donated clothing valued at more than $5,000 but didn’t provide a proper appraisal or correctly fill out Form 8283. Because he didn’t follow the grouping and appraisal rules, the IRS disallowed his entire deduction.
3. Keep Great Records (and Photos Help, Too)
Even small donations can add up, so don’t skip the paper trail. At a minimum, record:
- The name of the charity
- Date and location of the donation
- A detailed list of items donated (e.g., “5 dress shirts, 2 jackets, 3 pairs of shoes”)
- Take photos and keep them in your tax folder on the cloud for that tax year
- Estimated fair market value for each item
For valuable donations, consider using a donation valuation guide from Goodwill or the Salvation Army, or better yet, have items appraised by a qualified professional if the total value exceeds $5,000.
Photographs can also serve as useful backup, especially if your return is ever questioned. Keep a file or folder (digital or physical) with your receipts, acknowledgments, and images of donated goods.
TIP: This is a good rule of thumb for any charitable donation. Keep the receipt or acknowledgement letter to prove your donation and keep it in your tax folder for that year.
The Bottom Line: Give Smart, Deduct Safely
Charitable giving isn’t just generous—it’s a potential tax benefit, too. But to claim that benefit, you need to:
Itemize your deductions
Document your non-cash and cash donations properly
Comply with IRS rules for valuations and appraisals
When done right, your donations to Goodwill, the Salvation Army, or any qualified charity can help both your community and your wallet. Just don’t assume a bag of old clothes or all that used household furniture equals an automatic deduction—take the extra steps to document it right.
UPDATE: The One Big Beautiful Bill Act has some changes to charitable contributions. Beginning in tax year 2026, the charitable contribution deduction is available to taxpayers who do not itemize their deductions. Specifically, the provision reinstates and increases the above-the-line deduction
limit for charitable contributions made by non-itemizing individuals:
The maximum deduction for married individuals filing jointly is $2,000.
The maximum deduction for single filers is $1,000.
This is good news for those who don’t qualify to itemize deductions and still give cash to charity. Giving of goods or services does not qualify for the above-the-line deduction. This must be cash to qualify.