What is a 1098-C IRS Form?
Photo by stevepb under Pixabay License
What is a 1098-C IRS Form? Know When to Attach or Not to Attach this Document in Filing Your Tax Return
When you donate a vehicle to a charitable institution, you can claim a tax deduction, the amount of which depends on how much your vehicle was sold by the charity.
If your vehicle was sold for more than $500, the charity may send you a copy of a filled-up 1098-C IRS Form, which is called Contributions of Motor Vehicles, Boats, and Airplanes. You need to include this document to support your deduction claims when you file your itemized federal income tax return. In some cases, the Internal Revenue Service (IRS) may deny your deduction without 1098-C IRS Form attached to your return, so make sure to include this.
Form 1098-C is filed with the IRS by an accredited charitable organization whenever the latter receives a donated vehicle that has a selling price of more than $500. That document also takes note of your donated vehicle’s year, make and model, mileage reported on the date it was donated, and the vehicle identification number. Your full name, address and Social Security number are also printed on the document.
If the charity provided you any goods or services in exchange for your donation, you will have to reduce your tax deduction claim by the amount stipulated by the IRS for those goods and services.
When 1098-C IRS Form Is Not Needed Anymore
When you donate a vehicle to charity, always remember the $500 cutoff rule. If the vehicle you donated was sold by the charity for $500 or less, you can claim your tax deduction by choosing one of two options – your vehicle’s final selling price at auction or its fair market value. It’s a no-brainer that your choice will be the one that has the higher amount.
In this case, the charity is not required anymore to prepare a 1098-C IRS Form for you, which means you don’t have to attach the document to your tax return.
However, if the vehicle you donated was sold for more than $500, the fair market value option does not apply anymore. This means the final selling price of your vehicle is the sole amount you can claim as a tax deduction. In this case, the charity needs to provide you a 1098-C IRS Form, and you need to attach this in support of your tax deduction claim when filing your federal income tax return.
Things More Important Than Material Benefits
Tax deductions are not the only things that should concern you when donating a vehicle to a charitable organization. To car donors who are motivated less by material gains, the more important thing to consider is how your charitable contribution will be used. Will it be used to support a cause you believe in? Will it truly provide relief to people who badly need help?
If you find that the answers to these questions are both “yes,” then go ahead and make your car donation.
If you choose Breast Cancer Car Donations as the recipient of your car donation, you get the best of both worlds – your generosity would go a long way in helping people in distress, even saving their lives. At the same time, you get plenty of rewards, including a maximized amount of tax deduction for your contribution.
Know More About Breast Cancer Car Donations
Photo by Anna Shvets under Pexels License
If you want to find out more about how we at Breast Cancer Car Donations and our nonprofit partners are providing hope and relief to breast cancer victims, do visit our website’s FAQs page. For further inquiries on 1098-C IRS Form or any other matter, don’t hesitate to contact us at 866-540-5069. In case you’re ready to donate, you may call the same number or fill out our online donation form. Donate your car to Breast Cancer Car Donations and experience the most satisfying giving experience ever!