#3 Mistake: Overestimating charitable deductions
You donate a box full of clothes to a non-profit organization and that organization gives you a receipt, however the receipt you received doesn’t have a sum of money on it. You have to estimate the value of the items by yourself. But note that overvaluing donations translates to trouble.
Let’s say that when you bought those clothes their value was $500. Now, it seems reasonable to report $250 (half of the initial price), but it doesn’t necessarily mean that you are right. Used clothes and items are cheaper than you think.
When you want to make a donation to a charity, you should determine the donation’s fair market value first (if possible, determine it the same day you make the donation).
