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How to Donate Clothes to Goodwill for the Tax Deduction (& Secret Hacks!)

Last updated on November 9, 2018 By Millennial Boss 24 Comments

This post may contain affiliate links which means I may receive a commission if you purchase through my links. Please read my disclosure for more info.

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My friend Emily made $375,000 on Etsy in her first 2 years selling digital products. She's a new coach in the E-Printables online course teaching you how to get started with this side hustle too. She's a mom of two kids and does this part-time. Join us?

In the past two weeks, I have donated over 200 items of clothing. I typically donate one or two bags of clothing a year but decided it was go big or go home this year.

 

I donated 90% of our clothes to Goodwill

Before this recent purge, I had no idea how many pieces of clothing I owned.

I can tell you now that my fiancé and I had over 200 articles of clothing in our closets. Say what?!

I am not sure how the situation got this bad but it did.

Well, I sort of know. My fiancé and I both worked in the sports industry in the past five years so we got a lot of free athletic gear from those jobs.

I also didn’t become budget conscious until two years ago so I had a lot of clothing from my early and mid twenties.

In the last two weeks, I have went through each and every article of clothing, taking a picture and putting it in a suitcase for Goodwill.

You need to take a picture of each item in case you get audited later.

My goal was to donate as many clothes as possible to get a bigger tax deduction.

 

How to go through your clothes for Goodwill

My approach to donating was different this time.

Past purging efforts failed because I refused to donate items that were still in good condition, items that I wore occasionally, and items that still fit. There were so many times when I would put an item in the donation bag just to change my mind and pull it back out two minutes later.

Now, I realize how ridiculous it is to have 4 similar sweaters in different colors, 10 workout shirts, and 10 sets of pajamas, sweatshirts, and free t-shirts from years past.

I also eliminated 75% of my professional attire. I recently realized that I never want to work in an office that requires formal dress. So I decided to leave myself two or three nice office outfits and I donated the rest.

I also donated almost all of our old college gear. It made me sad to get rid of the sweatshirts and t-shirts with my college’s name on them but it had to be done. I have the memories and don’t need the stuff.

 

How I decided what clothes to leave

My strategy was to leave only two or three items of clothing in each category. For example: three nicer work shirts, three-workout t-shirts, two pairs of jeans, two casual t-shirts, etc.

I’m contemplating performing a second round of purging to get the number down even further.

I’ve read that you only need a small number of clothes in your wardrobe to have a signature style. I tried to think about that as I was eliminating clothes.

I don’t have a signature style quite yet but I kept asking myself as I held up each item if I would want it to represent my signature style.

 

Could you make money selling clothes on eBay?

I probably could have made more money selling my clothes on eBay. I didn’t sell any of my clothes online because I didn’t want the overhead of having to post the items individually, answer questions, and deal with different customers.

I itemize my taxes each year and just wanted to go with the tax deduction. If I had more time and didn’t have so much other stuff I was selling online, then I would definitely sell each item one by one on Craigslist or eBay.

Related articles: How I Saved $26,000 in 7 Months

 

How to donate to Goodwill for the tax deduction

For those of you that have never donated to Goodwill before, you need to count the items prior to getting to the store. The donation attendant will then give you a blank receipt signed and dated and then you fill out the donation amount yourself. I didn’t realize that the first time I donated and I hadn’t gone through all of the items prior for a final count.

Goodwill also has a donation tax guide that you can use to figure out the fair market value of each item. You deduct the total of your donations on your taxes. I have been taking pictures of everything I donate just in case I am audited.

Although the tax deduction won’t immediately help the wedding fund, it gives me peace of mind and space in my new apartment!

So bring on the minimalism! I’ll have to report back and let you know if I regret donating so much stuff! I have a feeling though that I am going to love it!

Related articles: How I Made $4,500 on Craigslist

3 Goodwill Hacks You May Not Know About

There are three hacks I recently became aware of after listening to this guest on FIRE DRILL PODCAST.

  1. If you donate, you can get a 30% off coupon on your receipt. You can use the coupon to buy a big ticket item such as a bicycle.
  2. Track the discounts on a calendar.  The Goodwill stores put items on massive discount on a regular calendar.  Get to know the discount calendar of your main Goodwill store.
  3. Pay by the pound for expensive yarn & fabric.  Instead of paying $80 for a spool of cashmere at a craft store, buy cashmere sweaters by the pound and dismantle.

 

Have you ever donated to Goodwill or sold items on Craigslist? What prompted the purge?

Going through my closet this weekend! Thanks for sharing!
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Julie paid off nearly $100k of debt and is on her way to financial independence. She is the creator of the Make Money with Printables side hustle course where she teaches people how to sell printables on Etsy and blog as a side hustle.
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Filed Under: Debt, Lifestyle, Money

About Millennial Boss

Julie paid off nearly $100k of debt and is on her way to financial independence. She is the creator of the Make Money with Printables side hustle course where she teaches people how to sell printables on Etsy and blog as a side hustle.

Reader Interactions

Comments

  1. Kevin @ The Debt Journey says

    June 5, 2016 at 6:31 pm

    Wow that’s awesome!

    I’m currently working a lot with EBAY, and a little with Craigslist. Craigslist is easier but I worry about the chance of getting robbed! I guess it depends a lot on where you live and if you have a safe place to meet. We don’t live in the safest city in the world (Memphis), so I have been skeptical about the face to face meet.
    I also have it wrote down on my to-do list that tomorrow I am getting all my excess clothes together and making the trip to Goodwill. I’m glad I read this article about counting how much you are donating or I would have had no idea!!!
    Truthfully I’m just ready to be less cluttered.

    -kb

    Reply
    • Julie says

      June 6, 2016 at 7:14 pm

      Less clutter feels amazing! Regarding Craigslist safety – at first I was freaked out. If someone seems sketchy in email or phone interactions or if they are too pushy – I don’t give out the address. I also have a big dog so I hope that deters people from coming back to steal or worse later. I also go to the bank at the end of each day so I am not carrying large amounts of cash on me. Good luck with the Goodwill trip!

      Reply
  2. Jen @ Frugal Millennial says

    June 5, 2016 at 8:21 pm

    Congrats on being debt-free! It must be an incredible feeling.

    Reply
    • Julie says

      June 15, 2016 at 12:59 am

      Thanks!

      Reply
  3. Nicole @Audaciously So says

    June 5, 2016 at 10:05 pm

    To be honest, I’ve been thinking about doing this for a while. Part of the reason I don’t is because of how much (perceived) work I think it’ll be to sort through all my stuff. (Terrible reason, I know.) I also have the hardest time with the whole, “I haven’t used this in 2 years but I might need it one day!” thing. Ugh. :/ The info you gave about Goodwill is really helpful though. And maybe this post will be the inspiration I need to actually do this thing.

    Reply
    • Julie says

      June 6, 2016 at 7:16 pm

      HA I totally get that. For some of the pieces of clothing, it took me two days to make the final decision to let it go. I just kept going through the keep pile until it got smaller and smaller! For Craigslist, I made a rule to myself that once I put something on the patio to sell, it stays out there. Even if it doesn’t sell, I am just getting rid of it! I tried to bring something inside yesterday “because it was nice” and decided to leave it out there!

      Reply
  4. Andrew @ Debt Freedom Journey says

    June 5, 2016 at 10:34 pm

    Purging that much stuff can be really difficult. My wife always gives me a hard time because I keep the box to everything. Every appliance, every electronic device, every pair of shoes. I find that I have difficulty purging items, but fortunately my wife is quick to tell me what I should get rid of 🙂

    Reply
    • Julie says

      June 6, 2016 at 7:18 pm

      I have to admit that I purged a lot of my fiancé’s clothing for him. He is onboard but it still pains him to let stuff go. I wanted to purge the Superman and batman t-shirts that he has (and I don’t particularly care for!) but I kept them 🙂 haha. I didn’t purge anything that is meaningful to him.

      Reply
  5. DC @ Young Adult Money says

    June 6, 2016 at 11:59 am

    My wife and I have been donating to Goodwill for quite some time now and we actually take a picture of everything we donate, and then have a spreadsheet to keep track of the counts of everything (i.e. shirts, pants, etc.). It makes it so easy at tax time.

    Reply
    • Julie says

      June 6, 2016 at 7:18 pm

      Great plan! I am starting the spreadsheet system too! Keeps things super organized when I do my taxes almost a year from now!

      Reply
  6. Des @ Half Banked says

    June 6, 2016 at 12:07 pm

    Ahhhhh so much yes to NEVER working in super formal offices ever again! I’ve done the same big purge, and let go of so many pencil skirts, that were – hilariously enough – leftover from business school, because I’ve always worked in smaller companies where casual was the way to go. And if it helps, I haven’t regretted a single item that I’ve let go so far!

    Reply
    • Julie says

      June 6, 2016 at 7:19 pm

      Thanks! Hoping someone will love my pencil skirts and suit jackets! Not me anymore though!

      Reply
  7. Matt @ The Resume Gap says

    June 6, 2016 at 3:35 pm

    Congratulations on being debt-free!

    I feel the same way about “I recently realized that I never want to go back to a professional office setting.” Any work I do in the future, I aspire to do in a t-shirt. I did away with about 20 “work shirts” before we started traveling, but there are more left at home. Might be time for another purge!

    Reply
    • Julie says

      June 6, 2016 at 7:21 pm

      Thanks! I feel the same way. Now I have the “look” just need the travel to go along with it!

      Reply
  8. Francesca - From Pennies to Pounds says

    June 6, 2016 at 8:11 pm

    Wow, congratulations! Sounds like you’ve been absolutely killing it! Well done.

    Reply
    • Julie says

      June 6, 2016 at 8:35 pm

      Thank you!!

      Reply
  9. Thias @It Pays Dividends says

    June 7, 2016 at 11:03 am

    Congrats on paying off the student loans! We made our last payment about a year ago and it has felt amazing not having to worry about them anymore! And nice job killing it on Craigslist! We have recently been purging a lot of the stuff we have in the house that we haven’t touched forever. We probably have about 80% of the clothes we owned down in the boxes waiting to be taken to Goodwill. It is amazing how much you accumulate without realizing it!

    Reply
    • Julie says

      June 7, 2016 at 3:57 pm

      I’m still so surprised! I just did another round of purging last night and came up with 20 items that I am taking to Goodwill. I think there is more fat to trim too. What was I thinking all of these years?

      Reply
  10. Broke Millennial says

    June 10, 2016 at 4:03 pm

    I purged my closet last weekend after also being inspired by Cait’s post. I still have quite a ways to go, but I plan to offload the items to Goodwill. I’ve sold on sites like ThreadFlip and Tradesy in the past, and made about $65 bucks, but my not that fashionable so I won’t really get a return for the amount of time it takes. I’d rather just get the tax deduction. The only issue is that Goodwill doesn’t do pick up in NYC and it’s just far enough away that hauling clothes is a pain, but close enough that cabs really aren’t keen on taking me. Silly city living complaint, but the clothes are just sitting in my office instead of actually getting dropped off!

    Reply
    • Julie says

      June 10, 2016 at 5:48 pm

      Awesome! I had a similar experience selling clothes. I got $45 (between $2-5 per item) and they rejected 90% of my clothes. Many of the stores are looking for young women’s clothing in the age range of 18-21 and that was purchased in the last two years. 99% of my clothes don’t fit that category. I used to sell clothes to consignment shops every christmas and summer break in college though and made a killing! Or enough to go back to Forever 21 and buy something cute for the next Saturday night 🙂

      Reply
  11. Pia @ Mama Hustle says

    June 14, 2016 at 8:13 pm

    I’m purging a ton of clothes and stuff too as we move. I’m selling some of the (very few) nicer pieces, but mostly I’m taking it to Goodwill. There’s something to be said for getting it out of the house rather than letting the time it takes to sell it deter me from doing anything at all.

    Reply
    • Julie says

      June 15, 2016 at 12:57 am

      Totally! I actually just closed down shop and took all the remaining “merchandise” to Goodwill. It was hard to turn down the cash but I needed my free time back.

      Reply
  12. Lorelai says

    September 23, 2016 at 12:12 am

    This is a great article! I purged my closet after reading A Guide to Quality, Taste, & Style by Tim Gunn. I highly recommend it. It helped me learn about the importance of wardrobe staple items. I no longer shop aimlessly, which is beneficial for my wallet and my closet space 😉

    Reply
    • Julie says

      September 23, 2016 at 2:34 pm

      Tim Gunn! I remember him from Project Runway. Thanks for the recommendation. I’ll check it out!

      Reply

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About Millennial Boss

Julie paid off nearly $100k of debt and is on her way to financial independence. She is the creator of the Make Money with Printables side hustle course where she teaches people how to sell printables on Etsy and blog as a side hustle. Learn more..

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About Millennial Boss

Millennial Boss is a lifestyle and personal finance blog created by Julie, who paid off six figures of student loan debt and is now on the path to financial independence and early retirement through side hustles. She lives in Seattle and teaches others how to start blogging and sell printables on Etsy.
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