Using A Car Donation Tax Deduction Calculator
In order to accurately assess how much your tax deductible car donation will be on your federal taxes, you should use a car donation tax deduction calculator, such as the Kelley Blue Book Used-Car Values calculator, that you can find on many websites, including Cars.com.
However, before you can actually calculate the exact amount of your car donation tax break, you must first find out exactly what the charity you donated your car will do with your vehicle. The charity must notify you within 30 days of when they sell the car or if they will “significantly” use the car in their operations (such as transporting workers to feed the hungry or help build homes for the homeless, etc.).
If they sell your car, the charity will need to provide substantiation of how much they sold your car for. If the amount they sold your car for was less than $500, then you should be able to apply the tax write off donations in the full amount to your federal taxes. However, if your car was sold for more than $500, you will only receive a car donation tax credit for the amount that your car was sold for, even if it was less than the fair market value of your car.
For instance, if your car was worth $1,000, but the charity only sold the car for $750, you can only apply a $750 car donation tax credit to your federal taxes. The charity must provide you with a tax receipt of how much it sold the car for so that you can claim this amount as a tax deductible gift on your federal taxes.
In the event that the car donation charity decides to significantly use your vehicle to help fulfill its services to the community, you can deduct the fair market value for your vehicle as a tax deductible gift. Again, the charity must show substantiation of this for you to legally claim the full fair market value for your vehicle on your federal taxes.
Using a car donation tax deduction calculator will enable you to determine exactly what the full fair market value for your vehicle is, as you will be able to input the year, make, model, and style to gain that value.