Many taxpayers will drop off clothing and other household items at charities such as Goodwill and the Salvation Army before the year ends, aiming to clean out their closets while also getting a tax break.

But because many charities don’t assess the value of those donated sweaters and pants when they hand you a receipt, it’s often up to taxpayers to figure out how much to deduct on their taxes — and that can be a gray area, experts say.

“People have a tendency to overvalue non-cash donations, especially for things like donated clothes,” says Eric Bronnenkant, head of tax at financial services firm Betterment. “They think about what they paid for it — maybe it was $60 for a sweater. But that same piece of clothing may not be worth anywhere near as much now.”

Tax experts say it’s important to be realistic in assessing the value of non-cash donations.

Assigning generous values to noncash donations may also be more tempting for some taxpayers under the tax reform that went into effect last year. Because the standard deduction almost doubled for single and married taxpayers — reaching $12,200 and $24,400 in 2019, respectively — donating household goods could help push some taxpayers across that threshold, allowing them to itemize and take even larger deductions.

But tax experts say it’s important to be realistic in assessing the value of non-cash donations. It’s also important to document those donations, especially for valuable items like cars or antiques.



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