Tax Benefits of Donating a Car
Donating your old car, truck, van or other vehicle to charity is perhaps the largest single charitable contribution you may give in your lifetime. Your motivation may be an act of convenience or benevolence, either way it’s important to be assured that you could obtain the maximum tax deduction allowed.
Donating a Car for Tax Credit
The tax law that took effect back in January of 2005 has helped make things less confusing. Because of the IRS, car donation is now less complicated in determining your cars value. Before 2005, tax benefits of donating a car were based on inflated book values, which tend to get less reliable as the car becomes older. With this new law, the amount you can deduct for your vehicle donation is precisely related to the amount it sells for.
- We make it simple to get the maximum tax benefits of donating a car. Call us or fill out our easy on-line form and we take care of everything else.
- Your car is professionally towed at no expense to you, and then sold at auction.
- The proceeds from the sale benefit the charity you have chosen and you will receive a receipt for your tax purposes.
IRS Car Donation Rules to be Aware of
For a car donation to be eligible for a tax benefit, the vehicle must be donated to a tax-exempt nonprofit organization that falls under IRS section 501(c)(3) which can receive tax-deductible donations. At Donate A Car, we have already done the work for you in providing a large list of trusted charities that meet this requirement. You can rest assured that whichever nonprofit organization you choose on our site to benefit from your car donation, that they are allowed to receive tax-deductible donations.
After your donated car is sold at auction, you will receive an IRS Tax Form 1098-C in the mail providing the amount you are allowed to deduct on your taxes.
- If your donated car sells for under $500, you are allowed to claim the fair market value of your car up to $500.
- If your donated cars sells for more than $500, you are allowed to claim the precise dollar amount that your car was sold for. We will provide you a completed IRS Tax Form 1098-C with your donated vehicle’s sales amount within 30 days after the sale.
- If your donated car sells for over $5000, you’ll also need IRS Tax Form 8283. When filing taxes, you will need to fill out IRS Form 8283 Section B which must include the signature of an authorized official of the charity.