Only itemizers can deduct car donations

Only itemizers can deduct car donations

Whenever you donate money or property to a tax-exempt charity, you can qualify for a tax deduction. However, such charitable contributions are deductible only if you itemize your personal deductions on Schedule A. If you don’t itemize, you get no deduction. Unfortunately, if you’re like most taxpayers, you don’t itemize. You should itemize only if all your personal deductions exceed the standard deduction.

Related Post : Donate Car to Charity California

A new tax law called the Tax Cuts Jobs Act (TCJA) took effect in 2018. The TCJA almost doubled the standard deduction to $12,000 for single taxpayers and $24,000 for married couples filing jointly. So you have to have a lot of personal deductions to itemize. Unfortunately, the TCJA eliminated or limited many personal deductions. Starting in 2018, they only include deductions for:

  • Charitable contributions – including cars and other vehicles
  • Health expenses over an AGI threshold
  • Up to $10,000 in state and local taxes
  • Home mortgage interest (subject to home loan limits)
  • Casualty and theft losses due to a federally declared disaster, and
  • Gambling losses (up to gambling winnings).
Read Also : Exceptions to vehicle donation rules

As a result of these changes, no more than five percent of taxpayers will be able to itemize during 2018 and later, compared with 30 percent in prior years. If you’re one of the 95 percent of nonitemizers, you won’t get a deduction for donating a car to charity.  One way to increase your ability to itemize is to bunch your personal deductions. The idea is that you pile on your personal deductions in a single year, giving yourself the maximum personal deductions for that year.

Other Article : Who Benefits From a Car Donation?

During the year you plan to itemize, do everything you can to make your personal deductions exceed your standard deduction. Pay every bill that will result in a personal deduction. Contribute as much money and property you can to charity.

Leave a comment

Your email address will not be published. Required fields are marked *