Car donation, do i need to file itemised tax?

[John105]

Well, I’m not exactly offering to share my tax returns, but we had a mortgage, charitable contributions, business expenses (back when employees could have those) and college expenses.

Our deductions were well over $40,000, closer to $50,000, but our income was modest.

Things were tight. We had three kids on college at the same time.

The deductibility of those expenses eased the burden somewhat. That’s the real intent of deductions, easing the burden on important expenses, not just pandering to lobbyists for certain interests…

Just glancing at what you said, business expenses stand out....that would do it for me in trying to understand.

Sometimes, I feel penalized for earning a decent living and living modestly. At the height of our itemized deductions, they were around $15k. You can see that even that is far short of the standard deduciton which came about I think 2018, and not that much more than the old standard deduction. There were times I have thought, why didn't I borrow more money for a bigger home...the interest is deductible. But imagine what would have happened with the new rules...

 

[Astro14]

Just glancing at what you said, business expenses stand out....that would do it for me in trying to understand.

Sometimes, I feel penalized for earning a decent living and living modestly. At the height of our itemized deductions, they were around $15k. You can see that even that is far short of the standard deduciton which came about I think 2018, and not that much more than the old standard deduction. There were times I have thought, why didn't I borrow more money for a bigger home...the interest is deductible. But imagine what would have happened with the new rules...

Don’t focus there. They were quite small, a few thousand, compared with paying for three college educations at the same time.

I will repeat that, because I think you’re focused on the wrong part of my story.

Three. Three kids in college.

At the same time.

 

[2005jettatdi]

My credentials, I am a Certified Public Accountant. I tell people it does not pay to buy tax deductions. Donate to a charity because you support it, not because you want a write off. The $600 charity deduction was for 2021 only. In 2020 it was $300. Very few people itemize because the standard deduction is so high, $25,900 for 2022.

Sell the car.

 

[Astro14]

My credentials, I am a Certified Public Accountant. I tell people it does not pay to buy tax deductions. Donate to a charity because you support it, not because you want a write off. The $600 charity deduction was for 2021 only. In 2020 it was $300. Very few people itemize because the standard deduction is so high, $25,900 for 2022.

Sell the car.

Agreed. We give to charity because we support that charity. The deduction is nice, but it is not why we give.

Similarly, a deduction means that you spent money on something. The deduction merely means that you spent before tax dollars, instead of after tax dollars, but you still spent the money. A deduction means that the thing on which you spent the money costs 15-40% less than it would have been were it not deductible.

But you still spent the money.

Buy a house, send the kids to college, donate to charity, you do these things because you choose to, not because you “get a deduction”.

 

[macarose]

Wait. You have three kids in college and want to charity a Sentra with only 126k miles?

Here's a better plan. Replace the transmission when it comes time. They are dirt cheap.

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Ask the junkyard for the VIN and mileage. I'll be happy to help you find one that has actually been serviced.

If you have already serviced your transmission once, just do a drain and fill, and learn how to drive with a light foot. Hard acceleration is murder on these components.

Light pedal + regular servicing = Longevity

 

[tedsweet]

unless you itemize you get no deduction

 

[MHartfield]

Car donations are hardly worth it anymore. I believe you can only deduct the amount the chartity actually sells it for. Sell it instead.

This post is correct. Unless there's a minimum on this rule, which I'm not going to bother to look up. There's other issues as has been pointed out that the Standard Deduction was raised in 201 or 2018, and a $150 or $600 isn't going to matter unless you've got a loan on your home.
Mike Hartfield, CPA

 

[Nick1994]

Sell it. Even if to CarMax or Carvana.

If it’s worth $540, you get to reduce your taxable income by $540. So you’d save about $130 on your taxes (24%). That’s if you itemize. Most people can take the standard deduction so donations and stuff like that don’t make a difference.