- According to the Internal Revenue Service, any car donation is tax deductible on your federal taxes, but the deduction cannot exceed 50 percent of your adjusted gross income. The amount of your deductible is based on the estimated worth of your car at the time of the donation, which is called its fair market value. For a link to the Kelley Blue Book, and an IRS guide on how to use a blue book to determine a fair market value, see Resources.
- In Nebraska, you can only claim a car donation deductible on your federal taxes if you donate to a charity that is a listed as a 501(c)(3) organization by the IRS. This includes religious, educational and charitable groups in the state. According to the website Goodwill Car Donation, you should also only donate to charities that are willing to pick up your car at your home, particularly if the car needs to be towed. For a link to the IRS database of authorized Nebraska charitable organizations, see Resources.
- In order to donate a car in Nebraska for a tax deduction, you must be in possession of your car title, which is transferred to the charity at the time of your donation. If you have lost your title, you can file for a replacement title at the Nebraska Division of Motor Vehicles (DMV). When you donate your car, the website Goodwill Car Donation recommends signing over the title yourself and removing your license plate to avoid any liability down the road. For a link to the Nebraska DMV, see Resources.
- In order to receive a tax deduction on a donated car in Nebraska, you must fill out Schedule A on Form 1040. Additional forms and documentation are needed for cars worth more than $250, $500 or $5,000. In the case of cars that are worth over $250, you only need written acknowledgment from the charity, which does not need to be attached to your tax return but should be kept as proof of the donation. If your car is worth over $500, you need to fill out Form 8283 Section A, which must be sent to the IRS with your return. For cars over $5,000, you must fill out and submit Form 8283 Section B, along with a written verification of value from a qualified appraiser.
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