If you donate a car to charity and itemize deductions on your income tax return, it may be possible to claim a deduction for your car donation.
In 2005, the IRS changed the laws related to tax deductibility of car donations because of exaggerated deductions based on inflated book values (book values tend to become less reliable as a vehicle ages). Under the new rules, the deductible amount of your vehicle donation is directly related to the selling price of your vehicle.
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Now more than ever, cash-strapped non-profits need financial support, and donating your car can be a great way to help. It’s also very generous.
It’s also important to remember that you can only take a charitable deduction if you itemize your deductions. So, before you give away your car, just make sure you’ve done the math and it makes sense for both you and the non-profit.
You Must Follow the Rules To Get That Deduction
A Car Donation Could Help With Your Taxes
You can only deduct a vehicle’s fair market value on your tax return under very specific conditions.
It’s easy to donate a car to charity if all you want to do is get rid of it. Simply call a charity that accepts old vehicles, and it will tow your heap away.
There are many people who are giving out used car donation and you have to wonder why they do it. The first reason why they do it is simply because they have no need for an extra car because they either bought a new one or simply have too many cars to begin with.
Making a veteran car donation is one of the ways by which you can do other people good while at the same time helping yourself. A car donation basically makes this possible because making one lets you help in funding activities and programs run by charitable organizations, while you get tax deductions in the process. Sure, you’re not exactly going to be making money through a veteran car donation but you will at least have to pay less for your taxes when it is time to file and it won’t cost you a cent to make. Not to mention that the fact that you are able to help who are in need should really sit well with you.