Cars Tax Deduction
May 17th, 2009
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Question: can I get a tax credit for donating my car, or only a tax deduction?
I want to donate a working pick-up truck to charity. I have heard all about the tax deduction I would be eligible for, but isn’t a deduction only helpful if I OWE money on my taxes each year? I always, always get money back… so will donating a car be beneficial for me? Or am I better off just selling the truck?
Answer: You get an itemized deduction for whatever the charity sells the truck for. They’ll send you a letter telling you how much it sold for. If you don’t itemize, you get no benefit from the donation.
A deduction reduces your taxable income and has value whether you are getting a refund (you’d get a larger one) or owe (you’d owe less). There never has been a credit for charitable donations that I’m aware of.
At any rate, don’t expect a windfall from the donation. If you’re in a 15% tax bracket and they sell it for $500, your tax benefit will be $75.
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Tags: car, cars, deduction, donate cars tax deduction, donating cars tax deduction, hybrid cars tax deduction, tax, taxes