Hi everyone,

I have a question of how much tax is deductible from car donation during yearly tax report.

I live in VA and my car is registered in PA.
I may need to donate the car to a charity near Washington dc.

Assume that its market value is $5000 and tax bracket is 30% and taxable income is $100,000.

Then, do I get income deduction($1,500=$5,000*30%)? My final tax will be $28,500=30,000-1,500.

Or do I get state tax deduction($150=$5,000*30%)? My final tax will be $29,850=30,000-150.
(assume that VA뭩 state tax is 3%)

Or something else.

I can write and read only English. I can not even read Korean. English answer will be greatly appreciated.

I have to make decision whether the car can be donated or not by the end of this weekend. Otherwise, too much fee of towing and parking will be charged. Please advise.

Best regards,
Someone who needs your help.

Dear buddy in VA,
Since 2005, income tax deduction through car donation has become under more strict scrutiny. You used to be able to deduct YOUR OWN estimate but now you can only deduct the amount the charity gets when they cash in on the car. This is as far as I know but you can search http://www.irs.gov with “car donation” and get more accurate answer. And charitable donations are 100% deductible through Schedule A on your Federal Income Tax return, meaning you get to pay federal tax as if you earned less. For example, if your AGI is 100,000 and your charity deduction is 10,000 and your business and medical deductions are 10,000, you pay tax only for 80,000. But keep in mind that your medical and buisiness expense deductions are not 100%. Only part of the expense is deductible only when they are above certain % of your AGI. Also cosider whether you are going to do standard deduction or itemized deduction. If you are single, don’t have mortgage payments and have not much to deduct, you will get to do standard deduction in which case, your charity donation might be wasted. But it is for good cause, as we all know. For state tax, you will have to check your state’s own tax law.