Be prepared to itemize your car donation tax deduction when filing your taxes. Most Americans do not itemize on their taxes, so it is not a routine practice for them. But in order to get a car donation tax deduction, you must take the extra step.
If you are unsure how to itemize, it's a good idea to seek help from an accountant. Car donation IRS rules require that donors fill out Form 1040, Schedule A.
There may be other forms and documentation required, depending on the value of the car donation. The IRS also wants donors to keep records on how they calculated the car donation tax deduction.
The IRS, for example, requires that cars valued at $500 or less be deducted at no more than "fair market value." The value you assign the car cannot be more than the sales prices listed in a used vehicle pricing guide, such as the Kelley Blue Book.
Donors must also consider the vehicle's condition and mileage when setting the value for a car donation. When the car donation is valued at more than $500, the amount of the car donation tax deduction depends on how the charity uses the gift. If you want more detailed information, the IRS offers free materials. Go to www.irs.gov, or phone, toll free, 1-800-829-3676.
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|Sheri Ann Richerson|