Donate Car Tax Write Off

There are probably many reasons why you may want to donate your car. Maybe you like the particular charity and believe in what they are doing and want to help. Maybe you just don't want to deal with selling the car yourself. Maybe you are buying a used car from someone other than a dealer and so have no way to trade in your old car.

And maybe, just maybe, you would like to get a nice fat tax write off for donating your car! If so, you've come to the right place. I will tell you everything you need to know about the tax rules involved, and how much of a write off you can expect to take, and what you need to know in order to not get tripped up or in trouble with the IRS.

What are the rules? Well first off, I HAVE to tell you that I'm NOT a tax expert. I am not a licensed Certified Public Accountant (CPA) so take what I say with a grain of salt. I highly suggest you speak to your own tax person (CPA) to get the skinny on these rules. It probably won't cost you anything. If you have someone prepare your personal taxes, give them a call. Often they will be happy to answer little questions like these at no cost as long as you are paying them to do your taxes; and especially if you have been with them for a long time.

First a little lingo. In IRS speak, donating your car is called a "noncash charitable contribution" so if you want to look all this stuff up at the IRS web site, run a search for that phrase.

Who qualifies? Not everyone qualifies for a tax write off for donating their car. First of all, you have to itemize your tax deductions. That is to say, if you just take the standard deduction every year, then you won't qualify for this tax write off. And unless your itemized deductions are greater than the standard deduction, you are better off not taking the car deduction and just sticking with the standard deduction. That one is a little harder to explain so let me try to break it down.

In 2009 the standard deduction for Married Filing jointly was $11,400. So lets say your car gave you a $2,000 deduction, and your other itemized deductions were $7,000 that is a total itemized deduction of $9,000 which is quite a bit less than $11,400. So in that case you would be better off not reporting your car tax write off and instead taking the regular standard deduction. Got it?

Standard deduction vs. Itemized deductions: Above I gave you the standard deduction for married filing jointly, but it varies. For a single person it is $5,700 and for a head of household it is $8,350. Of course, these are 2009 numbers, they tend to go up a little bit each year and you can find the current numbers at the IRS web site. The amount is important when considering your car tax write off.

Other Itemized Deductions: To determine if you should itemize or not, you need to know what things are considered itemizable for deductions (besides your car donation of course). Other common itemize able things are medical and dental expenses, home mortgage, other gifts to charity, tax preparation fees, unreimbursed employee expenses, and some other deductible expenses. Talk to your tax preparer for more details or check the IRS web site.

Donating Cars To Charity    About Us    Contact Us    Privacy Policy   

Copyright Sun Sep 5 2010 All Rights Reserved
www.edonatecar.com