‘When Does It Make Sense to Donate My Car for Tax Purposes?’
The question, “When does it make sense to donate my car for tax purposes?” must be bugging the minds of people who are thinking about donating a vehicle to support a great cause. In case you’re wondering, the process involved in making charitable contributions is extremely easy. All it takes is just one phone call to the charity of your choice, and then you’re basically done with the most important part of the process.
Have you been planning to get your hands off that eyesore of a car that’s been ruining your view of your backyard? Donating your vehicle to a charity doesn’t only give you the luxury of getting rid of a clunker without you going out of your house and without paying for anything. It also makes you eligible for a healthy tax write-off.
It’s All About Timing
If your current situation is anything like any of the ones that Veteran Car Donations has prepared on this list, maybe it’s about time you should start thinking about donating your clunker.
- When your vehicle needs constant repairs
What started as an oil leak on your driveway has resulted in multiple trips to the shop at painfully close intervals. We all fear this moment when our old reliable car begins to break down. When the cost of your vehicle’s repairs has exceeded its actual worth, there’s no sense in holding on to it.
- When you need the space in the garage for a new car
Don’t feel guilty about getting yourself a fancy ride when you’ve been busting your hump at work because you totally deserve it! Donate your old commuter car to make room for your shiny new one in your garage.
- When you’re tired of paying for storage fees
Although it’s perfectly ideal to have your RV, boat or any seasonal vehicle stored in a safe and secure location, the storage fees could break the bank. If you think you’ve had enough of this and you want more than anything to be free from this responsibility, donate your vehicle today.
- When you don’t want to sell it yourself
While selling your vehicle yourself will yield you some cash, the process could get extremely stressful for some folks. A huge amount of time and a great deal of effort is needed from you to place ads in the local paper, show and transport your vehicle, haggle with potential buyers, and deal with all the paperwork. You’ll know that it’s time to donate your vehicle when you want to save yourself from all the hassles associated with selling.
- When you want to reduce your taxable income
If you find yourself wishing to trim down your taxable income in the next tax season, the best way to do so is to donate a vehicle to an IRS-certified 501c3 nonprofit organization.
Tax Deduction Considerations
The IRS is extremely strict when it comes to tax deduction from donations. When you choose to donate a vehicle to charity, you need to take some things into consideration in order to maximize your tax return.
- Eligibility of the charity
Before you can claim a tax deduction for your donation, you have to make sure that you will be donating to a charity that’s been certified by the IRS as a 501c3 nonprofit organization. You can easily identify if the charity of your choice is eligible by using the IRS tax exempt organizations search tool.
- Itemizing returns
If you donate a vehicle to charity, the only way you can claim your deduction is through itemizing. The amount of tax deduction you will be eligible to claim depends on the amount the charity gives you and on which tax bracket you’re in. For instance, if your vehicle was sold for $1,000 and you’re in the 15% tax bracket, then the amount of tax return you’re qualified to get will be $150.
- The vehicle’s fair market value
The fair market value of a vehicle is the selling price with which the buyer and seller both agree on. You can only claim the fair market value of your donated vehicle if the charity makes use of your vehicle in the following ways:
- The charity sells it to an individual who badly needs it at a significant price.
- The charity has another plan for your vehicle such as improvements aside from routine maintenance.
- When your vehicle is sold by the charity for an amount less than $500.
- If the charity makes use of the vehicle for their work operation.
The most important thing to remember when the tax season comes is to prepare the necessary documents. Be sure to prepare those tax receipts and forms before the tax season arrives so that when it’s time for you to file, the process will be smooth.
Help Veterans through Car Donations
Donating a vehicle to Veteran Car Donations can give you plenty of benefits, including a hefty tax deduction.
Of course, the main purpose of donating a car to us is to provide life-transforming assistance to our struggling U.S. military veterans. Through car donations, various forms of such aid become readily available to poverty-stricken, handicapped, unemployed, sickly, and homeless veterans across the country.
We auction off all donated vehicles and use the proceeds to support the programs of our 501c3 nonprofit partners that provide our nation’s living heroes with mortgage-free and specially adapted homes, free physical and mental health care services, educational scholarships, career development, employment opportunities, financial assistance, and many other benefits.
While your vehicle donation will directly impact the lives of our former troops, you too will benefit from the top tax deduction you’ll receive after your vehicle is sold at auction.
You can donate to Veteran Car Donations by either calling us or filling out our online donation form. We accept vehicle donations wherever you are in the United States since we have car donation programs in all 50 states.
Show Our Vets You Care for Them!
We hope we’ve sufficiently answered the question, “When does it make sense to donate my car for tax purposes?” It also does make sense to donate a car as a payback to our veterans for the invaluable service and the heroic efforts they’ve done for ourselves and our nation—having defended our freedoms and protected our security during their time on the battlefields. Call us at 877-594-5822 and show them with your car donation that you do care for our heroes!