Are those donate your car for tax writeoffs on the level?

Question

Are those donate your car for tax writeoffs on the level?

Answer 1

They are. However, they usually will only accept newer cars in really good working order. Also, you need to be paying a lot of taxes for the write-off to be helpful.

Answer 2

Most of them are - go with a reputable charity whose mission you support.

That said, you need to find out if they are going to use your car or resell it and use the money they get from selling the car.  If they resell your car, they are going to issue you a form that states the value of the car, that is what you can deduct.

You also have to realize that you can only get the tax write-off if you itemize your deductions.  

If you take the standard deduction it will not provide you with any tax savings - it will just do your heart good by supporting a good cause and saving you the hassle of selling the old car!

Answer 3

yes, just be sure to donate to a reputable charity.

Answer 4

Sort of, but don't think you'll get a big tax savings for it - if you are just donating it for the tax deduction, then you'd be far better off just selling it.  Donate it only if you want to help that charity, and make sure it's a registered 501(c)3 charity.

To get any tax break from the donation, you have to itemize, which means that your total itemized deductions has to be more than the standard deduction for your filing status.

Your deduction is what they sell the car for - blue book value has nothing to do with it.  They normally sell donated cars at auction, which means that usually the sale price would be less than fair market value anyway.

An example:  if you are itemizing anyway even without the donation, and are in the 15% tax bracket, and donate a car that they actually sell for $2000, then your tax deduction would be the $2000 and your actual tax savings would be $300.