Car Donation And Taxes

Written by Rylee Newton
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If you recently gave your car to a non-profit organization, and you're thinking about writing it off, it's important to understand the new tax laws for charitable donations. If you plan on writing off your donation, you may also need to fill out additional IRS forms documenting the transaction. Before you claim any deductions, it's important to check with your accountant or financial advisor to make sure you're following the letter of the law.

If you're planning on donating your car to a charity, it's important to determine if the non-profit organization is eligible to receive tax-deductible donations. You can find out the status of charitable organizations by reviewing the data in IRS Publication 78. This publication is called the Cumulative List of Organizations, and it provides a list of all organizations that are tax exempt.

Filing Your Deduction

If you donate a car to a charitable organization, the only way to claim the deduction on your taxes is to file out Schedule A of form 1040. Schedule A allows you to itemize your contributions. The total amount of your charitable deduction cannot exceed 50 percent of your adjusted gross income.

If you plan on writing off your donation, it's important to keep accurate records. If you plan on writing off more than $250 for your vehicle donation, you must obtain a written acknowledgment of your donation from the charitable organization. You don't need to send this letter in with your taxes, but you do need to keep the letter in case the IRS audits you.


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