Tax Deduction Cars
August 22nd, 2009
Question: Federal Income Tax question – Car donation for charitable deduction?
I am a 21 yr old full time college student who is still a dependent on my mom’s tax return (she itemizes). I would like to donate my car which has a Fair Market Value of $5,000, to take advantage of the charitable deduction on my taxes. I currently have $300 in deductions without the charitable deduction.
What do you recommend I do to take advantage of the charitable deduction. Should I have my mom donate the car for me if I don’t itemize my deductions?
Thanks in advance
Answer: The first two people who answered the question are correct, but they missed one point. If the charity uses the car as part of its mission (A church providing a car for the minister, etc.), then the Fair Market Value is used, but if the value is more than $5,000 you need to have it appraised. The appraisal report (don’t forget to keep a copy) must be attached to the tax return.
Now, back to reality. Your Itemized Deductions must exceed $5,700 for you to get any benefit from them. Also, even if you have other deductions that total $5,700 (meaning that the $5,000 is fully utilized), you only save a fraction of the FMV. If you are in the 15% tax bracket, the $5,000 donation would save you $750 in taxes. In other words, you are better off financially if you sell the car.
Items on Amazon Right Now for Tax Deduction Cars:
| | Automatic Mileage Logger For years independent business owners have relied solely on pen, paper and sheer will to deduct mileage at the end of every tax year. As the government raises mileage rates, now at $.505, it’s becoming more and more appealing for micro business owners to keep legitimate mileage log books. You of course know what increases in mileage tax rates mean…increased IRS audit scrutiny. Until recently … |
| | Car, Travel & Entertainment and Home Office Deductions CPE Course (2006-2007) $32.95 Almost all business taxpayers, from the small sole proprietorship to the largest international corporation, incur business expenses for cars and travel and entertainment. In addition, in this era of long work hours and home-based entrepreneurs, it is estimated that more than 22 million people do some job-related work in their homes. Cars, travel and entertainment, and home office expenses are com… |
| | Car, Travel & Entertainment and Home Office Deductions, 2005-2006 $215.05 Almost all business taxpayers, from the small sole proprietorship to the largest international corporation, incur business expenses for cars and travel and entertainment. In addition, in this era of long work hours and home-based entrepreneurs, it is estimated that more than 22 million people do some job-related work in their homes. Cars, travel and entertainment, and home office expenses are … |
| | Cars, Cars, Cars (Fringe Benefits Tax Guide, Deductions, Fringe Benefits And Record Keeping, Report 84, May 13, 1992, Part 2) 1992 Commerce Clearing House, Inc. Report 84. Paperback, 64 Pages. This special report is a guide to determining the tax consequences of the business use of a car…… |
Gov. Jennifer Granholm extends tax credit to donation of used vehicles
A taxpayer can claim a state income tax credit of up to $50 for the value of a vehicle donated to a charitable organization.
Car Donation Tax Deduction tips and how to donate cars corr
Posted in 
Tags: