• Is Used Car Donation Worthwhile Under IRS Rules?

    For those considering used car donation to charities in order to get a tax break, it’s always worth looking at how IRS rules can affect your actual tax deduction. Without fully understanding the car donation IRS rules that apply to this kind of transaction, taxpayers can be disappointed when they go to “redeem” their donation on their annual tax return.

    Looking at the Merits of Car Donation under Existing IRS Rules

    What would-be donators have to understand is that the IRS keeps some pretty stringent rules about car donation for tax-deductible purposes. First, the car has to be donated to an “IRS approved” charity. The IRS keeps a list of these charities on file on their website.

    Also, for the tax deduction to be relevant, the taxpayer often has to choose an itemized deduction as opposed to a standard one. In addition, the taxpayer may have to only use the eventual resale price of the vehicle as the tax-deductible amount, which makes this very disappointing for those who wanted to use the entire blue book value of the vehicle as a tax deduction.

    Before you get into a car donation agreement, always research your tax-deductible value thoroughly. Don’t just listen to someone from an organization who claims that you can get blue book value as a tax- deduction. The reality is often more complex than that, and each driver has to look at whether it is worth their while to donate a car in order to get a tax write off.