How much will I get on my tax return if I donate my car to a charity?

[ashleyg0864]

I'm considering donating my car to Heritage for the Blind, which is a 501(c)(3) organization. They can guarantee at least $500 for a tax deduction for this. I expect to make less than $20,000 in 2017 which I believe will put me in the 15% tax bracket. How much money will I actually get on my 2017 tax return for donating my car?

[rjs · Accepted solution]

IF you have enough itemized deductions to exceed your standard deduction (see the comment by xmasbaby0), and IF your car is worth $500, and if you are in the 15% tax bracket, a $500 deduction for donating the car would reduce your tax or increase your refund by $75 (15% of $500).

[SweetieJean]

That depends upon how much they sell the car for. In order to get a $500 deduction (which they cannot and should not guarantee), the sale price would have to be at last $3,333. And any value over $5,000 requires a written appraisal.

Further, it only benefits you for Federal if your total itemized deductions are more than the Standard deduction.

State may be different

[SweetieJean]

The IRS allows you to claim a tax deduction of (a) the fair market value of your vehicle up to $500, or (b) if the charity sells the vehicle for more than $500, it will mail you a completed IRS tax form 1098-C with that value for your tax purposes.  You get to deduct that amount from your income. It is not a tax credit.
<a rel="nofollow" target="_blank" href="http://1800donatecars.com/rr/tax-deductible.html">http://1800donatecars.com/rr/tax-deductible.html</...>

[xmasbaby0]

If you cannot itemize your tax return with itemized deductions  (such as mortgage interest, property taxes, etc. that exceed your standard deduction, the charitable donation will not change anything for your tax due or refund at all.  You will simply get your standard deduction--which reduces the amount of income you are taxed on.

Your itemized deductions have to be more than your standard deduction before you will see a change in your tax owed or tax refund.  The deductions you enter do not necessarily count “dollar for dollar;” many of them are subject to meeting  tough thresholds—medical expenses, job-related expenses, casualty and theft losses, for example, must meet thresholds that are pretty hard to reach.  The software program uses all the IRS rules that apply to the expenses you enter, and it tells you if you have enough to use your itemized deductions or if using the standard deduction is more advantageous for you. 

Your standard deduction lowers your taxable income.  It is not a refund 

2017 Standard Deductions

Single    $6350  (65 or older + $1550)

Married Filing Separately   $6350  (65 or older +  $1250)

Married Filing Jointly           $12,700  (65 or older + $1250@)

Head of Household $9350  (65 or older + $1550)

[xmasbaby0]

In other words, you are highly unlikely to "get" anything on your 2017 tax return for donating the car.  If you need to receive some money for the car, you would be better off selling it.