Tax Deduction

Donate Your Used Car to an IRS registered nonprofit organization

Before you donate a used car to charity, make sure that the auto donation program you have chosen is a qualified, eligible, 501(c)3 IRS registered charity. If it is not a qualified organization, donating cars to them may not be tax deductible. You can call IRS Tax Exempt/Government Entities Customer Service at 1-877-829-5500 and ask if the charity is qualified. Be sure to have the organization’s correct name and its headquarters location, if possible.

Determine your charity IRS tax deduction

In order to claim your car donation you must itemize deductions on your personal tax return. For taxpayers, the decision to itemize on Schedule A of Form 1040 is determined by whether their total itemized deductions are greater than the standard deduction. Of course, many donors are not interested in the tax deduction and just want to donate a vehicle to charity so that it can be used for a good purpose. However, if you are interested in a tax deduction when you donate a car, you should understand that in order to obtain it, you must itemize your deductions and not just go with the standard deduction.

Calculate the value of the vehicle you wish to donate to charity

There are many online resources for determining the fair market value of your car donation. Checking the “blue book value” will give you guidance on the general value of your donated vehicle, but you should also take into account the overall condition of your car donation when donating to charity. 'Your car donation is tax deductible and will fall into one of these categories:

• For low value vehicle donations you can claim the fair market value up to $500.00 without any additional paperwork besides the receipt we will provide at the time of the pickup.
• If you donate a car that is worth more then $500.00, your deduction will be limited to the actual sale price of your car donation. Be sure to get a recipe from the charity stating the final sales price of your vehicle within 30 days of the sale of your donated car. Most car donation charity services will work to get top dollar for your car donation, however most vehicles are sold "wholesale" at auctions, dealerships etc. and are frequently sold for less then the Kelly Blue Book value.

Obtain the necessary IRS form to claim your car donation tax deduction

If your combined charitable donations of non-cash items are valued at more than $500 during the tax period then you will need to fill out IRS form 8283, which can be downloaded from the IRS web site: IRS form 8283.