When Can I Take a Donation?
The first, and most important, step toward claiming a vehicle donation on your taxes, is to know when you are able to claim a donation. A vast majority of people are not able to claim donations, vehicle or otherwise, because it does not help to lower their tax liabilities and in fact, sometimes, could hurt their liabilities.
Charitable donations, including donations of items, cars, household goods, and time, are claimed on the Schedule A. The Schedule A is not always filed with every return, a vast majority of filers don't use the Schedule A. If you have itemized your deductions in the past on your taxes, then you use the Schedule A to show those itemized deductions. Check the instructions for the Schedule A on the IRS website, www.irs.gov, to determine whether or not you will benefit from itemizing your deductions.
In general, if the items donated are valued at less than $250, you must provide the date of the contribution, amount of the contribution, and the name of the organization receiving the contribution. So if you donate a vehicle with a value at less than $250, it is treated as any other donation and the item is listed along with the qualifying organization receiving the donation and the approximate value at the time of donation. If the value is greater than $250 then you must also have documentation of the vehicle donated. If the value of the vehicle is greater than $500, you will need to fill out Form 8283 as well as keep the documentation already listed.
If itemizing your deductions is not beneficial, then you will not be able to claim the donated vehicle on your taxes for this year. There are however rules on carryover donations which may allow you to claim the donation in a subsequent year. Additionally, if you receive any goods or services in exchange for the donation, you must subtract the value of those goods and services from the amount you donate.