Car Donation Charity - Donate Car
IRS Tax Deduction FAQs and Information
Following are important information and links about tax deductions and
charitable contributions for your car donation.
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To further illustrate the car donation and tax deduction process we present some of the more frequently asked questions:
Each of the following car donation Tax Deduction FAQs are answered in detail below. Just click on the question to get the answer.
IMPORTANT DONATION INFORMATION UPDATE!TWO FREQUENTLY ASKED QUESTIONS AT THE END OF THE YEAR:
QUESTION #1:
Will my donation be good for the year that I sent in the donation form, even if I don’t receive the receipt until the beginning of the New Year?
ANSWER: YES!
IRS Publication 4303, “A Donor’s Guide To Vehicle Donations” states:
“… the written acknowledgment must contain … the date of the contribution…”
The date of contribution is the date that we received the donation form. So it can even be on the 31st of December and will still be for that tax year.
The only exception might arise if you cancel the donation and then resubmit it later, or if the donation is canceled by us or the towing/auction facility due to reasons of inability to make pick up arrangements or lack of proper vehicle documentation, etc. Generally if you work with the towing/auction facility and assist in any problems that might arise then your donation will still be considered effective the date you filled out the donation form.
QUESTION #2:
If I submit the donation form on the last few days of the year and the towing/auction facility does not pick up the vehicle until the beginning of the New Year does the donation still count towards the current year, i.e. the year I submitted the donation form online?
ANSWER: YES!, as stated above.
1. What information should be in a tax receipt?
2. Will I get the maximum value for my donated car on my tax receipt?
3. Does the fair market value get deducted from my taxes owed?
Tax Deduction FAQs
1. What information should be in a tax receipt?
The components for a vehicle tax receipt are: the charity's name; its Federal Tax ID number; the donor's name; date of donation; and, the year, make and model of the donated vehicle. The tax receipt is not required for filing your taxes, but should be kept for at least three years as a record of the donation.
2. Will you give me the maximum value for my donated car on my tax receipt?
This question is likely the result of various misleading claims made by certain car donation charities. Follow this link to get more information about these types of false or misleading claims.
It is the donor's responsibility to determine the fair market value of the vehicle. The fair market value is rather easy to determine.
When you send in your donation form we send you simple instructions that will assist you to determine your car or vehicle's fair market value.
If you are placing a fair market value of $5,000.00 or more on your vehicle, please mention that when you send in your donation form so we can arrange for the IRS required appraisal from a certified professional vehicle appraiser. If we feel that your vehicle is more valuable than $5,000.00 then we will arrange and pay for the appraisal.
More information about determining the "fair market value" of a vehicle.
No reputable charity will place any value, whatsoever, on your vehicle.
There is a term in law entitled conflict of interest, wherein a "clash" occurs between the public's interest and the pecuniary (financial or monetary) interests of an individual, or group.
For instance: if you find a charity (or a for-profit entrepreneur operating under the guise of the charity's name) claiming to give you the highest possible value for your vehicle, or any value at all that is what the IRS has determined to be a conflict of interest; and that is illegal.
This illegality is easy to see. The actual fair market value of your vehicle is what the IRS sees as in the public's interest. An inflated fair market value is what the IRS sees as being opposed to the public's interest. To avoid a conflict of interest the IRS has denied charities the right to place a value on donated vehicles or on any other donated property.
Legal tax receipts from 501(c)(3) charities may only provide proof of your vehicle donation and specify its nature. Legal tax receipts for vehicles typically only state the donor's name, the date of the donation, and the year, make and model of the donated vehicle.
3. Does the fair market value get deducted from my taxes owed?
No. That is not how it works. For a good overview of how the tax system works visit this page.
NOTE: Some of this information has been revised please see our new IRS Publications 526, 561 and 4303 pages for latest revision.
For some IRS tips visit this page.
For more tax information visit this page.
The fair market value does reduce your total tax liability (the amount you owe) assuming you itemize deductions and are in a position where you can claim a tax deduction for a charitable contribution.
Click here to find out how to determine the fair market value of your vehicle.
Fill out the Online Car Donation Form and that will begin the process.
