There are many ways to donate to nonprofit organizations. Vehicle donations are just one. The IRS has certain rules for nonprofits and donors about how Vehicle Donations are handled, so if you want to make sure your vehicle donations are tax-deductible, it’s important to make sure you follow those rules!
- Make sure the nonprofit charity you are donating to has the appropriate nonprofit status. You can search nonprofits on the IRS Tax Exempt Organization Search.
- Make sure you will get a tax benefit as tax deductions apply only to those who itemize their taxes on Schedule A of Form 1040 (which is estimated by some tax accountants to be less than 10% beginning in 2019)
- Check the value of your vehicle and find out if you need a written appraisal to ensure the donation is tax-deductible by checking the IRS document “A Donor’s Guide to Vehicle Donation”
- See what your responsibilities are a as a donor by checking the IRS document “A Donor’s Guide to Vehicle Donation”
- Complete Section A of Form 8283
Donors can find this information in the IRS document “A Donor’s Guide to Vehicle Donation”.
1. Provide a Written Acknowledgement for Vehicle Contribution Deduction of More Than $500
The nonprofit written acknowledgement must contain the nonprofit name, address, EIN#, the donor’s name and TIN/SSN, the vehicle’s VIN #, the date of the contribution and one of the following: “a statement that no goods or services were provided by the charity in return for the donation, a description and good faith estimate of the value of goods or services, if any, that the charity provided in return for the donation or a statement that goods or services provided by the charity consisted entirely of intangible religious benefit, if that was the case.” (IRS)
Also you must be aware of the Gross Proceeds Limit and Exceptions to the Gross Proceeds Limit.
2. Provide a Written Acknowledgement for a Vehicle Contribution of $500 or less
Read Page 5 of the IRS document “A Donor’s Guide to Vehicle Donation”.
Donations of vehicles to nonprofit organizations and both the nonprofit and donor should understand the process before making a donation to ensure the donor can receive a tax deduction.