A donation invoice is a form which can be used as a receipt when giving a donation to a charity. A request for a donation invoice should always be made when donating to a 501(c)(3) tax-exempt organization for tax purposes.
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Below is a list of the top donation categories that people and businesses make donations to every year. Even if a charity is tax-exempt, you still need to check with the IRS to see if the item donated is tax-deductible. For example, the Red Cross is a 501(c)(3) tax-exempt organization, however donors can not deduct the value of blood given to a blood bank. For more information, see the IRS Publication on Charitable Contributions.
- Blood (plasma) Donations (Not Tax Deductible) – How often blood donations can be given? Every 8 weeks. Where: Red Cross.
- Egg Donation (Not Tax-Deductible) – The process of a woman donating a reproductive egg.
- Car Donation (Tax-Deductible) – Used cars that are hard to sell can be discarded by giving to a charity. Almost all charities accept car donations. Use the Car Donation Wizard to find a car donation center.
- Clothes Donation (Tax-Deductible) – Clothes are biggest donated items that people give which is why some of the largest charities in the world happen to be Goodwill and the Salvation Army.
- Hair Donation (Not Tax-Deductible) – The IRS views donations associated with the human body
- Furniture Donation (Tax-Deductible) – With any furniture of worth, it’s always possible to find a charity to come pick it up. Use the Salvation Army Pickup service to schedule a time.
Okay, lets say you have a box full of clothes that have been sitting in your closet. April 15th (tax day) is approaching and you want to unload these clothes in order to receive a tax break.
Step 1 – Itemize the Clothing
Empty the box of clothing in a space where you can easily sort each item. Each item of clothing needs to be valued at fair-market value. This can be done by eyeballing the clothes but take into consideration that these clothes are old and used. Valuing the clothing should be assessed on the lower end. Use this clothing valuation guide as a reference. Use IRS Form 8283 when itemizing the list of clothing.
Step 2 – Select a Charity
You can’t give your donated clothes to a random charity. The charitable organization must be deemed as 501(c)(3) tax-exempt, which usually means that the charity is a nonprofit corporation. For clothing, a popular option is Goodwill. Look online to see where the closest store is located near you.
Step 3 – Donate
A pledge to make a donation doesn’t count until you actually make the donation, according to the IRS. Once the clothes are donated, the charity should give you an invoice or a receipt showing proof that you indeed gave the donation. The invoice should be kept for record keeping and the information from the invoice should be used to fill out Schedule A of Form 1040 come tax time.