QUESTION
Do donations lower your taxes significantly when your income is low? How?
Asked on Jul 14th, 2015 on Taxation - Michigan
More details to this question:
If I do not make much money (I make about $20,000/year), and I donate my very used car, will it be enough of a tax deduction to make a difference? The car is worth probably around $700. I do not understand how this works exactly, and I cannot afford to hire an accountant, so please help me.
3 ANSWERS
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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It won't change your taxes at all. Charitable deductions only lower taxes for people who itemize deductions.
Answered on Jul 15th, 2015 at 1:08 AM
Taxation Law Attorney serving Glendale, CA
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Irsfeld, Irsfeld & Younger LLP
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No. If you were paying INCOME TAX and itemizing deductions, then it might save you $105 or so. Sell the car instead. Donate some of the proceeds to your favorite charity.
Answered on Jul 14th, 2015 at 2:33 PM
Probably not. You need to itemize to get any benefit from a donation.
Answered on Jul 14th, 2015 at 1:53 PM