Tax-Exempt Organization

• The first threshold for claiming a tax credit for donations is to determine that the recipient organization is an IRS approved tax-exempt organization. The IRS refers to these organizations as "qualified charitable organizations." Unless you donate to such an organization, your donation will not qualify for a tax deduction. Review IRS publication 78 for a list of qualified charitable organizations.
  
  

Itemization

• You can only claim a deduction for charitable donations if you itemize deductions on your tax return. If you take the standard deduction, you cannot claim any deductions for you donated goods. Additionally, even if you itemize, you can only claim charitable deductions up to 50 percent of your adjusted gross income.
  
  

Fair Market Value

• You can generally claim a deduction equal to the fair market value of the item you donate. This is essentially the price at which the good would sell in a standard transaction. Although you merely must give your best estimate of the fair market value, it is always best to support that estimate with some type of evidence. For example, if you donate a car, you should probably use the value listed in the Kelley Blue Book (see Resources). If you donate other property, you might check online auction sites to determine the current selling price.
  
  

Evidence

• You must have a written document identifying the property you donated, the date of the donation, and the name of the receiving organization. If the donated property is worth more than $250, you also must have a receipt from the charity. If it is worth more than $500, your records must include additional details, such as how and when you received the property and what you paid for it. If the value of the donated goods exceeds $5,000, you must obtain an independent appraisal to support the value of the deduction.