So we are coming close to April 15th otherwise known as taxpocalypse. We receive anywhere between 14 and 24 phone calls a day asking how to donate a car to Kidney Kars (www.towKars.org) for a tax deduction (and how much their car is worth). It’s an easy enough process to call Kidney Kars at 1-800-Tow-Kars or find us online at www.towKars.org but the tax deduction part is a little bit buried in the site under the FAQ (Frequently Asked Questions) section entitled: What about the Tax Deduction? There we have a brief explanation from the IRS publication 526 “Charitable Contributions: found here (https://www.irs.gov/pub/irs-pdf/p526.pdf) and IRS Publication 561 “Determining the Value of Donated Property” found here: (https://www.irs.gov/pub/irs-pdf/p561.pdf) and IRS Publication 4303 “A Donor’s guide to Vehicle Donation” Found here. (https://www.irs.gov/pub/irs-pdf/p4303.pdf).
The general idea, however, is that the tax deduction applies to those who itemize deductions on their 1040 federal tax return. The amount of the tax deduction depends on the actual sale value of the Kidney Kar donation. Donors are allowed to claim a fair market value up to $499 unless the vehicle sells for $500 or more. If your Kidney Kar donation is sold for more than $500, you can claim the actual sale value as your deduction. Please check with a tax professional regarding your personal tax benefit. Then we have the links to IRS Forms one needs in order to claim their deduction on their IRS 1040, mainly Form 8283 Found here: https://www.irs.gov/pub/irs-pdf/f8283.pdf and Form 1098-C prepared for you by the National Kidney Foundation of Utah & Idaho’s program administrators, but found here: https://www.irs.gov/pub/irs-pdf/f1098c.pdf
This time of year promts a lot of calls to us about how much a car is worth, so again, the deduction is based on the selling price the foundation is able to get for the car, then measured against if the donor received any kind of promotional item as a reward for donating (in which case the cost of that promotional item must be subtracted from the tax deduction). People don’t realize that organizations who offer a hotel stay, or a free vacation are not actually charities running charitable car donation programs — they are businesses marketing a car donation program FOR a charity and most likely charge the charity 30-90% of the car proceeds before sending a very small amount to the charity. It is so important the charity you choose is local, has a low (under 25% overhead), is a qualified charity (has a 501 (c)(3), is in good standing with the state Division of Consumer Protection and the Better Business Bureau).
If you have more questions about how a car/vehicle donation can be tax deductible, check with a tax preparartax deductible 2018 or tax specialists to have them take a closer look at your taxes to determine the specific benefit donating a car to Kidney Kars or Utah & Idaho can mean to you. Once you feel it’s the right thing to do, just call our Utah/Idaho office at 1-800-Tow-Kars or (801) 226-5111 or just visit the donation website at www.towKars.org !