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I made a very large donation to Goodwill this year, about five SUV loads of clothes and household items. These items had been accumulated over many years.
I use TurboTax, and valued each item according to their "It's Deductible" program that automatically adds the value.
Goodwill gave me dated receipts for each of the trips I made to drop off donations. I wrote each item on the receipts.
The total amount is going to give me a very nice deduction. However, I am concerned that it is so large that it will trigger an audit.
Are there any guidelines about large donations? Has anyone ever received an audit due to large charitable donations?
I made a very large donation to Goodwill this year, about five SUV loads of clothes and household items. These items had been accumulated over many years.
I use TurboTax, and valued each item according to their "It's Deductible" program that automatically adds the value.
Goodwill gave me dated receipts for each of the trips I made to drop off donations. I wrote each item on the receipts.
The total amount is going to give me a very nice deduction. However, I am concerned that it is so large that it will trigger an audit.
Are there any guidelines about large donations? Has anyone ever received an audit due to large charitable donations?
We have. It was a royal PITA but we were well-documented.
You will have to prove that the items are really worth the deduction you are taking for them. Can you do that?
And the chance of an audit will depend on how you define 'large'. If the total of the donations are, like, 3% of your income... no, you will not get an audit.
I made a very large donation to Goodwill this year, about five SUV loads of clothes and household items. These items had been accumulated over many years.
The total amount is going to give me a very nice deduction. However, I am concerned that it is so large that it will trigger an audit.
Are there any guidelines about large donations? Has anyone ever received an audit due to large charitable donations?
7% of gross income will drastically increase your chances of an audit. But if you can easily justify all of it then go ahead but honestly Goodwill is the type that I believe just hands you a blank receipt and you fill it in. So the IRS might ask you if you have photographs or proof of everything you are claiming.
Also you have to be very conservative on the values. The biggest mistake I've seen is people valuing their junk as some sort of treasures.
Another thing you have to be concerned about is once you get audited you are more likely for future audits. You really need to see if its worth it.
But if you are careful with your record keeping and it's conservative go ahead and take the deductions. Take it from me. I've been audited 3 times in 5 years. And the last time they ended up sending me a check back for $9. I saved the check as a nice memento.
I noticed that Turbo tax valued my items higher than they were worth. I was conservative and came up with $600 for my donations to Salvation Army, I used the Salvation Valuation guide on their website. Turbo Tax valued the items at over a $1000. Needless to say I went with my valuation, because I felt it was closer to the actual value of the items.
I noticed that Turbo tax valued my items higher than they were worth. I was conservative and came up with $600 for my donations to Salvation Army, I used the Salvation Valuation guide on their website. Turbo Tax valued the items at over a $1000. Needless to say I went with my valuation, because I felt it was closer to the actual value of the items.
I think TurboTax values are off on some categories of item. For example, VHS tapes are valued at $4 each on TT, but I see them for sale at thrift stores, Goodwill, etc for 99 cents each.
So the box of VHS tapes that I donated to Goodwill will be priced at 99 cents each but when I entered it into TT as a donation to Goodwill the value was $4 each. No way would I claim $120 value on a box of 30 VHS tapes.
7% of gross income will drastically increase your chances of an audit. But if you can easily justify all of it then go ahead but honestly Goodwill is the type that I believe just hands you a blank receipt and you fill it in. So the IRS might ask you if you have photographs or proof of everything you are claiming.
Also you have to be very conservative on the values. The biggest mistake I've seen is people valuing their junk as some sort of treasures.
That's exactly what they do... they want proof that what you claim is the actual value of that item.
NO WAY I would claim $4 for VHS tapes. They are more than likely WAY off on all the other thing too.
This is a really interesting article. The chart on average deductions for US taxpayers showed a higher interest deduction than I am taking, and a lower charitable deduction.
Also, I am not taking any medical deduction and according to the chart every income group showed an average medical deduction.
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