Can I Deduct Goodwill or Thrift Store Donations?

Dropping off bags of clothing and household items at Goodwill or a similar organization can generate a tax deduction if you handle it correctly. Goodwill is a qualified charitable organization, so donations you make there are deductible if you itemize. The tricky part is determining the value of what you donated, since used items are worth their fair market value, not what you originally paid for them. The IRS expects you to value items at what they would sell for at a thrift store, not at their original purchase price. Get a receipt from the organization and keep your own list of what you donated with realistic values, because the IRS can challenge inflated claims.