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On our Goodwill receipt, it says that special rules apply to donations over $500. We have made two donations this calendar year, each being in excess of $400 (i.e. total >$800).

Do the special rules for donations in excess of $500 apply to each individual donation, or to the total for the year?

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Not to get hyper-technical, but you would be deducting it from your income, not your taxes. That is, it is a deduction not a credit. –  JohnFx Dec 8 '12 at 2:52
    
@JohnFx - and upon reading the title, I had the exact same thought. And I'll think it until every last reader always understands the difference between deductions and credits.... –  JoeTaxpayer Dec 8 '12 at 4:38
    
@JoeTaxpayer - it's vacation week :) –  warren Dec 8 '12 at 15:01

1 Answer 1

up vote 7 down vote accepted

From the IRS publication 561:

Deduction over $500 for certain clothing or household items. You must include with your return a qualified appraisal of any single item of clothing or any household item that is not in good used condition or better, that you donated after August 17, 2006, and for which you deduct more than $500. See Household Goods and Used Clothing, earlier.

Based on this quote, it is per item, not per total. However, if you donate more than $5K, an appraisal report is needed.

In any case you need to keep all the receipts, and be able to substantiate your donation. I suggest keeping photographs of the donated items, and write down the prices in the thrift shop at which you're donating, as the donation value.


Edit

I understand from your comment that you asked about the Kentucky State taxes. Similarly to Federal, you fill everything on Schedule A of your State tax form. From my brief reading, they're following the Federal rules, and require form 8283 for non-cash donations over $500. You only fill the form once, if total donations is over $500, but on the form you write down items over $500/$5000 separately with additional supporting documents (appraisals etc) if needed, or nothing - if not needed (for items below $500).

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that's the IRS regs - this question is about KY (though that got edited out of the title) –  warren Dec 11 '12 at 18:38
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You mean state taxes? Those follow the Federal rules (they require attachment of Federal form 8283 which is discussed in the publication I linked to). –  littleadv Dec 11 '12 at 18:53

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