How Much Can You Donate to Goodwill and Claim on Your Taxes?

Donating to Goodwill helps those in need and can provide tax benefits if you itemize deductions. However, the IRS has strict rules on how much you can claim, what qualifies, and how to document contributions. Failing to follow these guidelines could result in a lost deduction or issues during an audit.

Understanding limits, eligible goods, valuation methods, and required documentation is essential for maximizing your tax benefit while staying compliant.

Deduction Caps

The IRS limits charitable deductions, including Goodwill donations. Individuals can deduct up to 60% of their adjusted gross income (AGI) for cash donations to qualifying organizations. For non-cash contributions like clothing, furniture, or household items, the cap is typically 50%, 30%, or 20% of AGI, depending on the asset type and the recipient organization’s tax-exempt status.

If total charitable contributions exceed these limits, the excess deduction can be carried forward for up to five years, provided deductions continue to be itemized.

High-value donations have additional requirements. Donations exceeding $500 require filing Form 8283 with the tax return. If a single item or a group of similar items exceeds $5,000, a qualified appraisal is necessary. Without proper documentation, the IRS may disallow all or part of the deduction.

Eligible Goods

Donations must be in good, usable condition to qualify for a tax deduction. The IRS does not allow deductions for damaged or unsellable items. Clothing, shoes, and accessories are commonly accepted, provided they are clean and in wearable condition. Business attire, winter coats, and children’s clothing are especially valuable due to high demand.

Household goods, including kitchenware, small appliances, and furniture, must be fully functional. A coffee maker should work, and a dresser should have all drawers intact. Electronics such as televisions, computers, and gaming consoles are accepted at many locations, though outdated models may not always be resellable. Some Goodwill locations also recycle outdated electronics.

Books, toys, and sporting equipment are also eligible. Hardcover and paperback books, complete board games, and bicycles in rideable condition can be resold to support Goodwill’s mission. Policies vary, so donors should check with their local Goodwill branch to confirm accepted items.

Valuing Donations

Deductible value is based on fair market value (FMV), the price an item would reasonably sell for in its current condition. The IRS does not provide fixed values but expects taxpayers to use comparable sales and common resale prices as a reference. Goodwill offers valuation guides with general price ranges for frequently donated items, such as $4–$9 for men’s jeans or $2–$8 for hardcover books, though these are estimates.

Condition significantly impacts FMV. A designer handbag in excellent shape will have a higher value than one with visible wear. Brand reputation also plays a role, as well-known labels tend to retain more value. The same applies to household items—an energy-efficient microwave from a reputable brand may justify a higher valuation than an older, generic model. Donors can reference online marketplaces like eBay or Facebook Marketplace for secondhand pricing.

Large or unique contributions, such as artwork or collectibles, require extra consideration. The IRS may scrutinize inflated valuations, so donors should justify estimates with market comparisons. If an item’s value is uncertain, a professional appraisal may be necessary, particularly for high-value goods where FMV is not easily determined.

Documentation Requirements

Proper recordkeeping is essential for claiming a tax deduction. For donations under $250, a receipt from Goodwill is recommended but not required. Keeping a personal record with item descriptions, condition, and estimated FMV strengthens the deduction’s legitimacy if questioned.

For contributions between $250 and $500, the IRS requires a written acknowledgment from the charity stating whether goods or services were received in exchange. If a donor receives any benefit, such as a promotional item or event ticket, only the portion exceeding the fair market value of that benefit is deductible.

For non-cash donations exceeding $500 but under $5,000, Form 8283 must be attached to the tax return. This form requires details such as acquisition date, original cost basis, and valuation method. If the donation includes publicly traded securities or other financial assets, additional reporting rules may apply.