2018 is coming to a close but there is still time to take advantage of the tax benefits of donating cars for charity.  

You can donate your car anytime but if you want to claim the contribution on your taxes this year you need to make your decision to donate your vehicle by December 31st.  

One of the biggest factors in a donors decision to donate a car is the tax write-off.  There are many different car donation programs out there so make sure you do your research on who you are donating to in order to make sure your donation will be eligible.  At Cars for Charity we only work with registered 501(c)(3) nonprofits, meaning you can choose any charity you want to support and your donation will be tax-deductible.

Here are the answers to your tax benefit questions that might help you make your decision!

Question 1: What is the value of my car donation that I can claim on my taxes?

It depends on how much the car sells for – all of our vehicles are sold locally at an auction through licensed wholesale auto dealers.  If your car sells for over $500, than you can claim the FULL selling price on your taxes.  If your car sells for under $500, than you can claim up to $499 of the fair market value (which you can find here on KBB).  

Question 2: After I choose to donate and my car is sold, what forms do I need?

You only need a special tax form if your car is sold for over $500.  If it sells for under $500, we will send you a tax receipt which contains all the key information you need:

• Vehicle VIN, Year, Make and Model
• Date of Donation
• Federal EIN
• A statement that the vehicle was sold at arms lengths through two unrelated parties
• A statement that no goods or services were provided in return for this donation

The form you need if your car sells for over $500 is the 1098-c tax form.  It is simple enough though as we notify you of the sale price and ask for you to call in order to provide your social security number.  We take it from there and complete and mail you your tax form.

If your car sells for over $5000, there is an additional form to fill out – Section B of IRS form 8283 and you may need an independent appraisal.  Don’t let this discourage you from donating cars that still have a lot of value left though, we get car donations of antique and exotic vehicles all the time!

Question 3:  If I donate my car at the end of the year but it isn’t finalized until after the New Year can I still claim it?

Even if your car donation isn’t finalized until next year, the tax benefit is based on when the donation is started.  We will provide a tax receipt to you within 30 days of your vehicle being auctioned. So as long as you start your donation before your New Year’s Eve party you are all set!

Question 4:  What else do I need to do to claim my car donation tax deduction?

Once you donate your car and receive the proper receipt or form all you need to do is itemize your income tax return.

So there you have it!  If you own a car that you are interested in donating, take advantage this year of the tax benefits offered when donating cars.  Visit our Donate a Vehicle page to start searching through our charity partners or to begin your car donation!  You can also visit our Frequently Asked Questions page for answers to more helpful questions about transferring your title or how long it takes to pick up your car.