‘Can I Get a Tax Break For Donating My Car?’
Donating a car has its fair share of benefits for the donor. Not only will you help in pursuing the mission of your chosen charity to save or uplift the lives of underprivileged people but you also get yourself rewarded for your charitable contribution.
One of the rewards many donors expect is their entitlement to a tax deduction. That’s why it’s not uncommon for a prospective donor to ask a charity, “Can I get a tax break for donating my car?”
To be able to attract more donations, charitable organizations will quite expectedly do their best to provide convenience and all the allowable benefits to their donors. Many of them offer free pickup and towing services. They also offer their donors a quick and hassle-free donation process where they handle all the required paperwork. All the donors have to do is contact them.
The best incentive they can offer their prospective donors is the eligibility to receive a tax write-off. However, only charities with an IRS-certified 501(c)(3) nonprofit status can offer such eligibility. That’s why donors who seek tax benefits should see to it that they are donating to a 501(c)(3) nonprofit organization.
Tax-exempt charities that accept vehicle donations issue to their donors a 100% tax-deductible sales receipt days after their donated vehicle is sold at auction. This receipt serves as the donors’ ticket for claiming their tax deduction, the amount of which is determined by the selling price of their donated vehicle or its fair market value.
If you donate a vehicle in good condition, the charity will most likely auction it off. It will be sold at its highest possible price point based on its fair market value. If your vehicle was sold for over $500, you can deduct that amount to your tax bill when you file your itemized federal income tax return.
If you donate a run-down car that’s no longer in running condition, it may be sold for salvage. When that car gets sold for $500 or less, you can claim as your tax deduction either its selling price or its fair market value not exceeding $500, whichever is greater.
How Do You Get a Tax Deduction?
After donating your vehicle to your chosen charity, you will transfer its title to that organization. When your vehicle is towed, you will receive a towing receipt. This releases you from all liability on your vehicle from that point onward, giving you the right to cancel your car registration with the DMV and stop paying for its insurance. This receipt also allows you to take the minimum tax deduction of $500 or less without further paperwork.
You will receive from your chosen charity another receipt, which is your vehicle’s 100% tax-deductible sales receipt, within 30 days of the sale of your donated vehicle. If the selling price of your vehicle is over $500, this is the receipt you can use in claiming a tax deduction of the same amount.
Donors are advised to consult with tax professionals to determine the exact amount of tax deductions they can claim for donating their vehicles.
Once all is clear, be sure you itemize your deductions first on your tax return. You can have extra savings if your total itemized deductions are greater than the standard available deduction.
How Will Your Donation Be Used?
When you donate a vehicle to us at Veteran Car Donations, we will sell it at auction and use the proceeds to support the programs and services of our charity partners. These nonprofits are dedicated to providing all sorts of benefits to our veterans, active-duty members of our armed forces, and their families. For instance, homeless veterans are given the chance to own mortgage-free homes while those who have service-connected disabilities are also entitled to own mortgage-free and specially adapted homes. Other needy veterans receive free mental health care, employment opportunities, job training, transitioning assistance, tutoring support and education scholarships, financial assistance, and many other benefits.
Since your donation will be used by our IRS-certified 501(c)(3) nonprofit partners, you are entitled to receive the highest possible tax write-off depending on your vehicle’s final selling price or fair market value.
You can donate to Veteran Car Donations by either calling us or filling out our secure online donation form. We accept donations of nearly all types of vehicles wherever you are in the United States since we have car donation programs in all 50 states.
Enjoy All the Benefits Car Donors Are Entitled to Get with Us!
Now that you’re fully aware of the general terms for receiving tax deductions, you can confidently donate your vehicle to your chosen charity without fear that you won’t get anything out of it. Call us at 877-594-5822 and get started with your car donation. We’ll make sure that you’ll enjoy all the benefits that a car donor is entitled to.