Your maximum tax write off for a car donation explained

Maximum tax you can get out of a car donation

What’s the maximum tax write off for a car donation?

It depends on the car, but most donations fall into three categories:
  • Under $500
  • Over $500 but less than $5,000
  • Over $5,000

In order to be eligible for a tax deduction, a car must be donated to a tax-exempt nonprofit organization, also known as a 501(c)(3).

Kars4Kids is a nationally recognized 501(c)(3) nonprofit.

How much of a tax deduction do you get for donating your car?

According to the IRS, if a charity sells your car for less than $500, you can claim the fair market value for up to a maximum of $500.

If the car sells for more than $500, you can claim the full sale price for your tax deduction.

No matter what your tax deduction is, we email you your tax receipt as soon as your car sells.

Each time we receive a car donation, our team of experts evaluates it to determine how best to get the highest sale price for it.

Fair market value (FMV) is the determined price something should sell for on the market.

How fair market value is calculated

Kars4Kids generally does not retain possession of the cars; we always work to receive the highest possible sale price.

We take into account many factors, including:

  • Year
  • Make/model
  • Mileage
  • Local market conditions. 

Depending on the car, we’ll either sell it for parts or as is. 

What is an appraisal, and do I need to do it?

An appraisal is a professional opinion of what something is worth, or what it could get on the market.

Kars4Kids does appraisals on real estate so the donor can deduct the full appraised value, but with cars, the sale price is deducted and the donor gets a receipt for the correct amount after the car sells.

There is no need for a donor to do an appraisal on car donations.

Is there a way for me to maximize my tax write-off?

The rules are the same for all car donations to all nonprofits.

It’s therefore a good idea to do research into any other benefits the nonprofit might be offering, as well as where the charity will be going to.

How do I know how much my car sold for, and how does that translate to taxes?

As soon as your car sells, we send you an e-mail receipt for tax purposes. The e-mail will contain all the information you need for documentation, including:
  • The name and address of our charity
  • The date of donation
  • The place where you donated your car
  • A description (year, make, and model) of your car
  • Written acknowledgement if the car sells for more than $500

Kars4Kids does not give tax advice, so always check with your accountant.

We do have a useful guide for car donation tax filing, though. 

Because your deduction is based on the sale price no matter where you donate your car, you’ll want to make sure you choose an IRS-registered 501(c)3 nonprofit that is experienced, knowledgeable, and committed to getting you the best value possible.

Generic selectors
Exact matches only
Search in title
Search in content