Car Donation Tax Deduction
Car Donation Tax Deduction
When getting rid of a vehicle, why not consider making a car donation for a tax deduction? The clunker could qualify you for a significant tax benefit, provided you follow the proper steps to maximize the write-off amount.
Keep in mind, those who are looking to donate a car for a tax credit should understand the difference between credits and deductions. While there are no credits for automobile contributions, there is the potential for a tax deduction. Below is more information on how the process works and what you need to know!
The Process of Donating a Car for Tax Purposes
Another big benefit of donating a vehicle is the convenient process. Rather than hastling with repairs, selling or making a trade-in, we give you an easy and simple path to donate it. Likewise, the contribution liberates you from storing, maintaining and paying for insurance on the automobile that’s been occupying space in a driveway or garage.
Here’s how the process works:
- Find a qualifying charity. In order to get an IRS auto donation deduction, you have to give the vehicle to a certified IRS 501(c)3 charity. Contributing to Kids Car Donations, for example, automatically makes you eligible.
- Request to donate. We handle all the paperwork and towing, so all you have to do is relax and let us take care of the logistics. In all 50 states, an individual can schedule a fast, free pickup at the time and place of choice.
- Wait for a tax receipt. Within 30 days after the sale of the vehicle, we’ll send you an IRS tax-deductible receipt to give you proof of donation come tax time.
- File for a deduction. The amount one can deduct for an automobile contribution depends on its selling amount. Essentially, if the car sells for less than $500, you can claim a deduction of $500; if it sells for more than that, you may claim the selling price with IRS form 1098c, which we could provide by request. In order to claim a deduction, you will have to itemize on your federal tax return the same year the donation was made.
Additional Benefits of Vehicle Donation
While the potential for a tax deduction is obviously motivating, the truth is, it’s not the only reason to consider giving away a car to charity. Think about it: by contributing a vehicle, you fund meaningful programs, such as the ones for hurting kids we support at Kids Car Donations. The automobile becomes financial resources for nonprofits that help children who are battling disease and illness across the country; it literally saves lives!
Likewise, you enjoy a fast, convenient, no-hassle process of getting rid of the clunker. You free yourself from keeping a car that is no longer being used. At Kids Car Donations, we take all kinds of vehicles, whether or not they’re in running order. It’s a win-win for everyone. Ready to learn more? Get started on your donation today!