Who Can Deduct a Goodwill Donation
Whether you can deduct your donation depends on two things: what you gave and whether you itemize. A tax deduction lowers the income you’re taxed on. Itemizing means listing your individual deductions on Schedule A. If you don’t itemize, you take the standard deduction, a flat amount based on your filing status.
Goods vs. Cash Donations
The rules differ for dropped-off goods and cash gifts, especially if you don’t itemize.
| Donation type | If you itemize | If you don’t itemize |
|---|---|---|
| Goods like clothing or furniture | Deductible at fair market value | Not deductible |
| Cash given to Goodwill | Deductible | Deductible up to $1,000 ($2,000 if filing jointly), starting in 2026 |
The new deduction for non-itemizers covers only cash contributions to certain qualified organizations. A bag of clothes left at a donation center doesn’t count toward it.
The New 0.5% Floor for Itemizers
If you itemize, a new limit also starts in 2026. You can generally deduct charitable contributions only to the extent your total gifts exceed 0.5% of your adjusted gross income (AGI). AGI is your total income minus certain adjustments.
For example, with an AGI of $100,000, the first $500 of your donations wouldn’t be deductible.
How to Value Donated Items
Your deduction for goods equals their fair market value. That’s the price a willing buyer would pay for the used item, which is usually close to thrift-store pricing. The price you originally paid doesn’t set the value.
Condition matters too. Clothing and household items generally must be in good used condition or better to be deductible. IRS Publication 561 walks through how to value donated property.
Records and Forms You Need
The paperwork you need grows with the value of your donation. Generally, keep a list of what you gave, noting each item’s condition and estimated value.
| Donation value | What you need |
|---|---|
| Any amount | An itemized list noting condition and value |
| $250 or more for a single contribution | A written acknowledgment from Goodwill |
| Over $500 in total non cash gifts | Form 8283, Section A (for items or groups up to $5,000) |
| Over $5,000 for one item or group of similar items | A qualified appraisal plus Form 8283, Section B |
For gifts of $250 or more, your Goodwill donation receipt works as an acknowledgment if it describes the property. It also needs to say whether you received any goods or services in exchange.
Sources
- IRS, Topic 506 (charitable cash contributions)
- IRS, Publication 561
- IRS, About Form 8283
- IRS, About Schedule A
