Whenever you donate an item to charity, you may be able to deduct the value of that item against your income if you itemize your deductions. When you donate a vehicle to charity, you can deduct up to $500 with a simple receipt from the charity. However, if your item has a value above $500, the charity may send you a From 1098-C in accordance with 26 U.S Code § 170 (f). If you choose to file without a 1098-C, the Internal Revenue Serice (IRS) may deny your deduction.
Why You Need Form 1098-C
When you donate a vehicle to a charity and the fair market value is more than $500, the maximum deduction you can take generally is the fair market value of the vehicle on the day of donation or $500, whichever is smaller. If you wish to claim a deduction that is larger than $500, you need to include Copy B of Form 1098-C with your tax return. ItsDonated provides a plan receipt for boats that sell for more than $500 but will also provide a 1098-C. In order to complete the form, ItsDonated will require your Social Security number.
Information Reported on Form 1098-C
Form 1098-C reports both the donor and the donee contact information to the IRS including addreses and identification numbers. In the case of the donee, ItsDonated reports the federal tax identification number of the charity. In the case of the donor, ItsDonated reports a tax identification number if the donor is a company or a social security number if the donor is an individual. The form also includes the date of contribution, the date of sale, the year/make/model of your vehicle as well as an identification number for the vehicle (in the case of the boat, usually the Hull Identification Number) and the gross proceeds from the sale.
Why We Need Your Social Security Number
ItsDonated utilizes an encrypted E-File system to process your 1098-C form. In order for ItsDonated to properly submit the 1098-C to the IRS, we will need your Social Security number. The IRS will match their copy of the 1098-C (copy A) against your copy which you submit with your filing (copy B). If you choose to file without form 1098-C, the IRS may deny your deduction.
Your sensitive data is encrypted using the AES (Rijndael) algorithm with 256-bit randomly generated keys through our partner in Portland, Oregon. Accordingly, ItsDonated never stores your most sensitive of information...ever. Your 1098-C copies will display a redacted social security number so only the IRS will have access to the actual data. For more information, visit our partner filing website by clicking here.