In addition to providing aid to vulnerable adults and children across America, donating your car has fantastic benefits for you too. One of the reasons so many people choose to donate is due to the car donation tax deduction offered as a result. On this page, we’ve got all of the tax information you need to know. Alternatively, if you have any questions that this page doesn’t answer, please give us a call on (877) 689-0815 and we’ll be happy to assist.
As a general rule, it’s useful to keep the following in mind. Vehicles that sell for less than $500 at auction or need to be recycled due to poor condition, your tax deductible receipt will be for the value of $500. This is the minimum you’ll receive for any donation, regardless of what the vehicle sells for (even if it sells for considerably less than $500). If your donated vehicle sells for more than $500, you’ll be able to claim the exact amount your vehicle is sold for.
There is still more to know regarding paperwork and applications, however, it’s useful to keep the above in mind when donating. Also please keep in mind that all of the information on this page is not intended to be tax advice. If you want professional advice from a qualified expert, please consult your own accounts or tax preparers in regards to all legal matters surrounding car donation. Tax issues can greatly vary depending on the individual donor, so please seek professional guidance if you’re not entirely certain how donating your vehicle will affect your taxes.
Car Donation Categories
When donating your car, your donation will fall into one of four categories. In this section, we’ll explain exactly what they are and the IRS forms you’ll need to fill in order to benefit. These are:
- Your donated vehicle a) not in good working condition, b) our charities have to recycle it, or c) doesn’t sell at auction for more than $500, then your tax deductible receipt will be to the value of $500. This is fair market value that can be claimed without filling in any additional paperwork. This is most common with vehicles that are old, rundown or not in working condition.
- If your donated vehicle sells at auction for more than $500, then you’ll be able to claim the amount that your vehicle was sold for as a tax write off. To do this, you’ll need a 1098-c form or an 8283 IRS Form. While the 1098-c form is exclusively used for vehicles, the 8283 IRS Form is for any property which has been donated to a charitable cause. However, both are acceptable forms to file a car donation as a tax write off.
- If your donated vehicle sells for more than $500 but less than $5,000, you’ll have to fill out the same forms as above for a non-cash charitable contribution. Both the 1098-c form or the 8283 IRS Form are accepted for this task. A tax write off for a donated motor vehicle is a straightforward step inside Section A of the 8283 IRS Form.
- If your donated vehicle sells for over $5,000, you’ll need to fill out either a 1098-c form or an 8283 IRS Form with a written appraisal. You’ll find this inside Section B of the 8283 IRS Form.
Additionally, you are also required to keep a number of records available when donating non-cash items to charity. In most cases, this includes:
- The name and address of the charity,
- The date of your donation,
- The place where you donated the vehicle,
- A description of the donated vehicle,
- Contemporaneous written acknowledgment from the respective charity.
For more information, please see the following link: https://www.irs.gov/pub/irs-pdf/p4303.pdf
Legitimate Donating Charities
We understand that making a car donation is a big step and requires a lot of trust in your desired charity. That’s why we’re here to tell you that all of the charities we work with are genuine car donation programs with all donations being deductible from your tax bill. Our charities are all 501(c) organizations with the IRS, meaning donors can claim a car donation tax deduction under the following circumstances:
- The non-profit charity makes certain use of the car under charitable deeds. This is the category that Rawhide Ranch, Kars4Kids and the American Council of the Blind fall under.
- The charitable organization increases the value of the vehicle significantly through considerable repairs (such as new parts, extensive servicing, extensive modifications, etc).
- The charity donates or sells the vehicle to an individual in need for a very low (below market) price for the purpose of helping them with transportation.
If you’re considering donating your vehicle to any other donation program out there, please ensure that they’re a registered 501(c) non-profit organization. If you donate a vehicle to any program that doesn’t have such status, you cannot use your deduction as a tax write off.
How To Get Your Car Donation Tax Deduction
Our charities are able to make a difference due to the generous donations of the public. The charities we work with are all highly reputable and have been helping vulnerable people all across the United States for many years. You can rest assured that when you donate to any of our affiliated organizations, your dollars are certainly going to the best places possible. Whether it’s helping the visually impaired or giving disadvantaged children the aid they need to live a more fulfilling life, it all starts with your generosity.
We understand that the tax deduction aspect of donating a car may be your biggest motivation for doing so, so our charities are committed to helping you every step of the way. If there’s anything you’re unsure about, feel free to contact us or one of our charities directly and we’ll do everything we can to put your mind at ease. Here is a short breakdown of everything you need to know when filing for your tax deduction:
- Organize your car donation with a 501(c) registered charity of your choosing. With any of our affiliated charities (Rawhide Ranch, Kars4Kids, the American Council of the Blind), you can do this through our online form or by calling us on (877) 689-0815. We’ll talk you through the process and once you’ve donated, our charities will do the rest.
- Depending on what state you’re located in, you may be required to hand over the car title with your donation. In any case, it’s best to hand over your title regardless of whether it’s required or not. Buyers will be more receptive to a vehicle with all of the necessary paperwork in check.
- Once the donation process is complete, request a receipt for your transaction from the respective charity. With all of our charities (Rawhide Ranch, Kars4Kids, the American Council of the Blind), a receipt is sent to you as standard. If you don’t receive yours within 24 hours, please call up and request it be sent again.
- Keep hold of your receipt until it’s time to complete your tax form for the year. Scan a copy of it to your computer in case it gets misplaced. You may be required to send a copy of it to the IRS along with your completed tax form.
- When you are filing your taxes for the previous year’s car donation, simply fill out a 1098-C Form and attach it to your federal tax return. Alternatively, fill out an 8283 IRS Form instead. The 1098-C Form is specifically for motor vehicle donations, while the 8283 Form is for general property. Both can be used to file for a car donation.