How much can you write off donating a car?

Your deduction depends on what the charity does with the car, and it's capped by either the sale price or fair market value (FMV), not simply what you think the car is worth.

The general rule: if the charity sells your vehicle, your deduction is limited to the gross amount it sold for, even if that's less than the car's actual value. If the sale price is $500 or less, you can generally deduct the lesser of $500 or the car's FMV.

When you can deduct full fair market value instead:

• The charity uses the vehicle significantly in its operations, such as delivering meals or providing transportation services
• The charity makes a material improvement to the car before selling it (major repairs, not just cleaning)
• The charity gives or sells the vehicle to a needy individual at a below-market price to further its charitable mission

For any of these exceptions, determining an accurate fair market value matters because it becomes your actual deduction amount. If your claimed value exceeds $5,000, the IRS requires a qualified written appraisal to support the deduction on Form 8283, and the charity must provide a written acknowledgment (often Form 1098-C) confirming how the vehicle was used or sold.

Because these rules involve AGI limits and substantiation thresholds that shift year to year, confirm specifics with a tax professional. For help establishing the value itself, see how to value a donated car, and weigh the pros and cons of donating a car before you decide.