May 30, 2014

Your Car Donation and the IRS

One of the best parts of donating your car to charity is the tax deductions your act of generosity will earn you. Who wouldn’t want to donate and get thousands of dollars deducted from his taxes?

However, you should note that the IRS has made some significant changes to the way you can claim deductions from your recently-donated car. Here are a few things you need to remember when donating your car to charity:

Qualified Nonprofits

Make sure that the charity you are donating the car to is qualified under IRS guidelines. If not, the IRS will not allow you to claim even a dollar’s worth of deductions. Be thorough and check the IRS website for a list of accredited nonprofits.

Get a Receipt

If your car is worth more than $500, the IRS will ask for a receipt to prove how much the charity got for your car. You get this receipt from the charity or the car donation processing center once they have sold it.

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