Tax Deduction Regulations for Car Donation

When donating your car to a charity for a car donation deduction, it is very important to consider the rules involved in claiming a car donation deduction in your tax return. First, you will have to find out how the charity will be using your vehicle, will they use it themselves or will they sell it?
When you donate your car to a charity for a tax deduction, you have to find out whether it is eligible to give you such a tax deduction. Some organizations may surprisingly get you in trouble in this context.
There are many resources such as publication 78 which can help guide you on which organization are eligible, as well as the list we have provided here at the site.
It is very important to remember that car donation deductions must now be itemized. The car donation “deductee” will have to have a detailed receipt in regards to their car donation deduction.
So remember that the standard deduction does not apply any longer for car donation deductions and now they must be itemized.
You will have to find out what the actual fair market value of the car is. You can find this information through the use of Kelly Blue book and more resources.
If you do not use the fair market value of the car being donated, you will not be able to deduct the amount on your tax return. Only the fair market value can be deducted in your car donation deduction.
Also remember that a charitable contribution deduction must be filed for records as part of the car donation deduction.
Even though there may now be a lot of steps involved in car donation deductions, there are a lot of benefits, including free towing service, write-off of the fair value of the car, providing goodwill to charities and not to mention getting rid of that car that just sits there anyway.
Be sure to look at our list of eligible car donation deduction organizations for more info.