When you donate furniture to a charity or some other tax-exempt organization, you can deduct the full value of your donation from your taxable income, as long as you itemize your deductions. Depending on your income, that could save you as much as $35 in taxes for every $100 worth of items you donate. But be careful. The IRS says you can deduct only the "fair market value" of the items--and it's up to you to figure out what that is.
Verify that the organization to which you plan to give furniture is eligible to receive tax-deductible donations. You can check an organization's status by calling the IRS toll-free at 877-829-5500 or by using the IRS's online search utility. See the link in the Resources.
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Determine the fair market value of the items you are donating. This is the trickiest part of the process, as the IRS offers only guidelines, not definitions, for what constitutes fair market value (FMV). If you're donating a brand-new piece of furniture that's still being sold in stores, then FMV is just the current retail price. But if the item is broken or out of style, the FMV will be only a fraction of what it sold for originally--if anything. See the Tips below for guidance on determining FMV.
Document the fair market value. Whatever way you figure out FMV, collect evidence to back it up. For example, take pictures not only of the items you're donating, but also of similar items on sale in stores. Find comparable items online. Hold onto the purchase receipts for items even after you give them away. If the IRS comes around asking you to justify your deduction, you'll want to have proof already in hand.
Call the organization you're donating to and arrange to have the furniture picked up or dropped off.
Obtain a receipt. The organization should provide an itemized receipt of the items you donated. Some organizations may even provide their own estimate of FMV; others will leave it to you to provide such information. When you call to arrange the donation, ask if the organization provides such estimates.
Itemize deductions when you file your income taxes. You cannot claim deductions for charitable contributions unless you itemize your deductions using Schedule A.
Fill out IRS Form 8283 if your total contributed property adds up to more than $500. Attach both this form and Schedule A to your federal return.
Keep the records related to your donation with the rest of your tax records for that year. That way they'll be there for you in the event of an audit.
If you donate furniture that will be sold in a thrift store, you can use the price the store sets for the item as the FMV. A review of websites such as eBay and Craigslist can give you a sense of where similar items are being priced--although if they don't sell, then the prices may not reflect FMV. The Salvation Army has compiled a list of typical value ranges for donated items in good condition, including furniture. However, it stresses that the list is only a guide. See the link in the Resources.
For any single donation worth more than $250, the organization must provide you with a receipt describing the item and stating whether you received anything in return.
You cannot deduct charitable contributions totaling more than 50 percent of your adjusted gross income for the year.