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Tax deduction vehicle donation

Tax Benefits of Car Donation

Tax deduction vehicle donation When you donate through our program you are eligible for a tax deduction. However, to claim your deduction you need to itemize on your income tax return.
In 2005, the IRS changed the laws related to tax deductibility of car donations because of exaggerated deductions based on inflated book values. Under the new rules, the deductible amount of your vehicle donation is directly related to the selling price of your vehicle.
Donate a car and if it sells for less than $500 you can take a tax deduction equal to the 'fair market value' of your donation up to $500. Fair Market Value is explained as the "Blue Book" or "Guide Book" value of your vehicle. The charity is legally prohibited from providing fair market value to the donor but you can access that information easily. See our car donation to charity help links below for
Kelley Blue Book, NADA Guides or Edmunds.

Tax deduction vehicle donation

The receiving charity is required by IRS to send the donor a receipt or "contemporaneous written acknowledgement" within 30 days of the vehicle sale. This receipt must include the following:

1. The gross selling price of the vehicle (if sold for greater than $500)
2. Year, Make, Model and VIN Information
3. A statement that the vehicle was sold at arm's length between two unrelated parties
4. And a statement that no goods or services were received in return for your contribution.*

*Keep in mind, companies promising goods or services in return for your car donation are legally cutting into the amount that you can claim for a tax deduction.

Tips To Maximize Your Car Donation Tax Deduction

Car Donation Wizard wants donors to know that donating a car to charity not only helps the organization fund worthwhile research and activities, but you also may be eligible to claim a tax deduction for your charitable contribution. Here are some car donation tax tips:

1. Beware of 'charities' where you don't see their good works in your community. Many car donation companies that claim to support kids or kars are often deceiving well intended donors with cute websites and jingles. For more information on these unscrupulous operations, you can access useful information here: https://www.charitywatch.org/charitywatch-articles/charity-finishes-last-at-car-donation-charities-micro-mini-share-of-proceeds-go-to-charity/163
2. Make sure the charity is eligible to receive tax deductible contributions. The most common types of qualified organizations are section 501(c)(3) organizations, such as charitable, educational, or religious organizations. Visit IRS.gov to search for registered charities. Car Donation Wizard only works with esteemed, 501(c)(3) non-profit organizations.
3. Be sure that you get a receipt from the charity for your car donation. Car Donation Wizard delivers the charity tax receipt for your records following the sale of your vehicle.
4. If the car is worth $5,000 or more, an independent appraisal may be necessary. The donor would fill out Section B of IRS Form 8283.
5. Always consult your tax adviser or the IRS for more information about how you can claim charitable deductions. The IRS can answer your tax questions and can provide tax forms, publications, and other reading materials for further assistance. IRS materials are accessible through the Internet at www.irs.gov, through telephone ordering at (800) 829-3676, Tax deduction vehicle donation and at IRS walk-in offices in many areas across the country.

Car Donation Tax Deduction – How To Get The Maximum Tax Benefit Out Of Your Vehicle Donation

Donating your car or vehicle to charity can be a great way to get a 2018 federal tax deduction (state income tax deductibility depends on state law), and Wheels For Wishes makes it easy. If you would like to help your local Make-A-Wish® and get the maximum tax deduction, then you’re already almost done. It’s as simple as filling out the little form to the right or calling 1-877-431-9474. We make the process easy, and you get the most good (and highest tax deduction) for your car. Not only that, but you are also helping a local child’s wish come true.

how car donation tax deduction works

Prior to January 2005, the IRS was allowing people who donated to a qualified car donation program to take a tax deduction based on their vehicle’s market value no matter how much or how little the vehicle sold for. Determining the market value of a donated vehicle is often quite difficult and time-consuming, which made determination of the amount of the tax deduction confusing. Fortunately, as a result of the new tax law that went into effect in January 2005, the IRS has taken the guesswork out of determining the value of your donated car, truck, RV, boat or other vehicle.

The IRS allows the taxpayer to claim a charitable tax deduction as follows:

• We make it easy to get the maximum tax deduction for your vehicle donation! Simply filling out the quick form to the right (or call 1-877-431-9474) and we take care of the rest. Your vehicle is picked up, sold, and proceeds benefit your local Make-A-Wish®, but you also get a 100% deductible receipt.
• If the donated vehicle is sold for less than $500, you can claim the fair market value of your vehicle up to $500 or the amount it is sold for if less than fair market value.
• If the donated vehicle sells for more than $500, you can claim the exact amount for which the vehicle is sold.

For any vehicle sold for more than $500, the exact amount it is sold for will be stated on your notification mailed to you, which in turn will be your charitable tax deduction. For additional information, the IRS provides A Donor’s Guide to Car Donations (Publication 4303 linked below), which details the determination of the value of your donated vehicle. As always, we help people donate their cars every day, and we would be happy to help you do the same. Feel free to call us at 1-877-431-9474 with any questions you might have and one of our representatives will help you.

Frequently Asked Car Donation Tax Questions

Q:Will my vehicle donation be good for the year that I sent in the donation form, even if I don’t receive the receipt until the beginning of the New Year?

A: YES! IRS Publication 4303, “A Donor’s Guide To Vehicle Donations” states: “… the written acknowledgment must contain the date of the contribution…” The date of contribution is the date that we received the donation form. So it can even be on the 31st of December and will still allow a charitable vehicle deduction for that tax year.

Q:Does the donation count toward the year I submitted the online form even if the vehicle isn’t picked up until the new year?

A: YES! As stated above.

Q: Some charities offer vacation packages as incentives to donate. Does that affect my tax deduction?

A: YES! If a charity provides a commodity, like a vacation package, for example, in exchange for a car or vehicle donation, then the tax receipt from that charity must state the fair market value of that commodity and the fair market value of that commodity must be subtracted from the value of the car donation.

For example: If your vehicle sells for $1,000.00 at auction and your vacation package that you receive has a fair market value of $400.00, you can only deduct $600.00. That’s $1,000.00 for the donated car less $400.00 for the vacation package resulting in a maximum deduction of $600.00 ($1000.00 – $400.00 = $600.00)

We certainly do not want donors to be shocked by receiving a tax letter that states they have to subtract the fair market value of the vacation from the value of their vehicle.

Latest IRS Publications Concerning Vehicle Donations And Deductions

• IRS Pub. 526 – Charitable Contributions – An excerpt regarding non-cash charitable contributions
• IRS Pub. 561 – Determining the Value of Donated Property – An excerpt regarding fair market value
• IRS Pub. 4303 – A Donor’s Guide to Car Donation – An excerpt regarding new tax law information

We’re Ready To Help, and It Couldn’t Be Easier

We work hard to get you the maximum tax return for your vehicle donation. Feel free to call us at 1-877-431-9474 with any questions you might have and one of our representatives will help you.

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