Can I get a tax credit for donating my car, or only a tax deduction?
You get an itemized deduction for whatever the charity sells the truck for. They’ll send you a letter telling you how much it sold for. If you don’t itemize, you get no benefit from the donation. A deduction reduces your taxable income and has value whether you are getting a refund (you’d get a larger one) or owe (you’d owe less). There never has been a credit for charitable donations that I’m aware of. At any rate, don’t expect a windfall from the donation. If you’re in a 15% tax bracket and they sell it for $500, your tax benefit will be $75.
Donating a car gives you a deduction, not a credit. It only gives a tax benefit if you have tax liabiltiy for the year – this doesn’t necessarity mean that you owe at the end, but that you don’t get back ALL of your withholding. Also, there is only a benefit if you itemize, not if you take the standard deduction. And the benefit is small compared to the value of the truck. If you are donating it because you want to help the organization, great, but if you are doing it for the tax deduction, you are much better off just selling it even if you don’t get a lot for it.
