Donate Used & Junk Cars to Charity for a Tax Write Off

Donate Your Used Vehicle to Charity

The Internal Revenue Service wants to remind taxpayers to obtain the correct forms after donating a used vehicle to charity for a tax write off. You must remember to get a written acknowledgement stating the fact that you donated your car. If you donʼt have a receipt from the charity for the fair market value of the vehicle then, you cannot deduct it from your taxes. For deductions of more than $500, you are required to attach the receipt to your tax return for the year of the donation.

Deduction is Limited to Gross Profits

As of January 1, 2005, a taxpayerʼs deduction is limited to the gross proceeds from the sale of the vehicle by the charity. The charity has to give you a receipt or written form of the sale within 30 days of the sale of the vehicle. If the charity spends any money on repairs or upgrades, that amount is deducted before the gross profit is calculated.

When to Claim Deduction

Some may be wondering when to claim the deduction. Do you claim it when you donate it or do you claim it after it is sold? The charity does not need to sell the vehicle in the same year that it was donated. A taxpayer can take a charitable contribution tax deduction only for the year the vehicle was donated to the charity. What if the charity doesnʼt sell it in the same year? You do not have to worry about that at all. You take the deduction for the year you gave the donation.

Checklist for Donating Used Vehicles to Charity

• Make sure you obtain written acknowledgement from charity
• You can deduct the gross profit from the sale
• Deduct donation for the year the vehicle was donated
• Taxpayers who itemize their deductions can take a charitable contribution deduction
• Attach the written receipt to your tax return

To learn more about donating junk cars to charity for a tax write off, please visit Turbo Tax Online for more help. Turbo Tax Online will help you meet all of the IRS requirements for your charitable deduction of your used vehicle.

Alabama AL, Alaska AK, Arizona AZ, Arkansas AR, California CA, Colorado CO, Connecticut CT, Delaware DE, District of Columbia DC, Florida FL, Georgia GA, Hawaii H, Idaho ID, Illinois IL, Indiana IN, Iowa IA, Kansas KS, Kentucky KY, Louisiana LA, Maine ME, Maryland MD, Massachusetts MA, Michigan MI, Minnesota MN, Mississippi MS, Missouri MO, Montana MT. Nebraska NE, Nevada NV, New Hampshire NH, New Jersey NJ, New Mexico NM, New York NY, North Carolina NC, North Dakota ND, Ohio OH, Oklahoma OK, Oregon OR, Pennsylvania PA, Rhode Island RI, South Carolina, South Dakota, Tennessee TN, Texas TX, Utah UT, Vermont VT, Virginia VA, Washington WA, West Virginia WV, Wisconsin WI, and Wyoming WY