IRS 1098-C Explained

What is IRS 1098-C?

IRS 1098-C is a tax form used to report contributions made to qualifying charities, specifically when the donated property is a vehicle, boat, or airplane. This form is required to document the fair market value of the donation, which can significantly impact the donor's tax deduction. It is typically provided by charities to donors who’ve contributed these types of items, ensuring compliance with IRS regulations.

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Purpose of IRS 1098-C

The primary purpose of IRS 1098-C is to facilitate the reporting of vehicle and similar property donations to the IRS. This ensures both the donor and the charity properly document the transaction for tax reporting. Having this form helps confirm the fair market value of the donated property and is crucial for claiming any tax deduction. The IRS requires this form to help prevent fraudulent claims on tax deductions related to charitable contributions.

Where is IRS 1098-C used and by whom?

The IRS 1098-C form is generally used by individuals and businesses that donate vehicles, boats, or airplanes to charitable organizations. Here are some typical scenarios:

1.

Individuals who donate a car to a nonprofit for a tax deduction.
2.

Business owners who donate a company vehicle to a charity.
3.

Nonprofit organizations that receive and resell donated vehicles to fund their operations.

In these cases, the charities issue the IRS 1098-C form to the donors, ensuring all parties meet tax compliance standards.

Step-by-step: how to fill out IRS 1098-C

Filling out the IRS 1098-C can seem daunting, but it's straightforward when broken down into simple steps. Here’s how to complete the form:

1.

**Part 1: Donor Information** - Input your name, address, and the vehicle identification number (VIN) or other identification details.
2.

**Part 2: Charity Information** - Enter the name of the charity, its address, and its tax ID number.
3.

**Part 3: Vehicle Information** - Note the make, model, and year of the vehicle being donated.
4.

**Part 4: Fair Market Value** - Document the vehicle's fair market value at the time of donation, and provide a brief description of how it was determined.
5.

**Sign and Date** - Make sure to sign and date the form before submission.

You can fill out the IRS 1098-C electronically using pdfFiller, which simplifies the process by allowing you to input your information directly into the form fields.

Who is required to complete IRS 1098-C?

Any individual or entity that donates a vehicle, boat, or airplane to a charitable organization must complete IRS 1098-C. This is particularly relevant if the value of the donated property exceeds $500. Both the donors and the charities that receive these items are responsible for filling out and issuing this form to ensure accurate reporting to the IRS.

Information you need to complete IRS 1098-C

To fill out IRS 1098-C correctly, you'll need the following information:

1.

Your personal details: name, address, and taxpayer identification number.
2.

The charity's information: name, address, and EIN (Employer Identification Number).
3.

Details about the vehicle or property donated: make, model, year, and VIN.
4.

The fair market value of the donated property.
5.

A description of how the fair market value was determined.

How to submit IRS 1098-C

You can submit IRS 1098-C using several methods:

1.

**Online Submission** - Some charities have online platforms where you can submit the form directly.
2.

**Mail** - You can send the completed form to the IRS and keep a copy for your records.
3.

**Directly to the Charity** - Many times, you need to give the completed form to the charity receiving your donation.

Be sure to submit the form in a timely manner, typically by the tax return due date to avoid any penalties.

When to update or refile IRS 1098-C

You may need to update or refile IRS 1098-C in instances such as:

1.

A change of address for the donor or charity.
2.

Incorrect information provided on the original form.
3.

Changes in the fair market value of the donated item after filing.

Timely updates help maintain compliance with IRS regulations and ensures all parties have accurate records.

What happens if you don’t file IRS 1098-C?

Failing to file IRS 1098-C correctly and on time can lead to several consequences:

1.

**Penalties**: The IRS may impose fines for late filing or inaccuracies.
2.

**Loss of Deductions**: Not filing the form can disqualify you from claiming any deductions related to the donation.
3.

**Increased IRS Scrutiny**: Incomplete or missing forms can trigger audits and further scrutiny from the IRS.

Hence, it's crucial to ensure that all information is accurate and submitted in a timely manner to avoid these potential issues.

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Frequently Asked Questions About the IRS 1098-C

What is the IRS 1098-C form?

The IRS 1098-C form is a document used to report contributions of vehicles, boats, and airplanes to charities. When a donor makes a non-cash donation of one of these types of assets, the charity must provide the donor with a 1098-C, which reports the fair market value of the item and details about the donation. Understanding the IRS 1098-C is crucial for claiming accurate deductions on your tax return.

Who needs to file the IRS 1098-C?

Donors who are giving away vehicles, boats, or airplanes to qualified charitable organizations need to receive and file the IRS 1098-C form. Charities must issue this form if the donated item has a value of over $500. Ensuring you have the IRS 1098-C form allows donors to claim the appropriate deductions on their tax returns.

How do I obtain an IRS 1098-C form?

You can obtain the IRS 1098-C form through the charity to which you are donating your vehicle, boat, or airplane. After the donation is complete, the charity is required to provide you with a completed form detailing your contribution. If you need additional copies, you can also find blank forms on the IRS website for reference.

What information is included on the IRS 1098-C form?

The IRS 1098-C includes critical details such as the donor's name, the charity's name, the description of the donated vehicle or property, and the date of donation. Additionally, it reports the fair market value of the donated item, which is essential for tax purposes. This information helps you accurately capture your contribution for deductions on your tax return.

What should I do if my IRS 1098-C form is incorrect?

If you discover any discrepancies on your IRS 1098-C form, you should contact the charity that issued the form immediately. They are responsible for correcting any errors and reissuing an accurate form if necessary. An incorrect IRS 1098-C can lead to complications with your tax return, so prompt action is recommended.

Can I use the IRS 1098-C for deduction purposes?

Yes, the IRS 1098-C is essential for claiming a tax deduction on non-cash charitable contributions, particularly for vehicles, boats, and airplanes. The information on the form validates your donation, which is necessary when filing your tax return. It’s crucial to ensure that the deduction claimed aligns with the fair market value reported on the IRS 1098-C.

Is there a deadline for submitting the IRS 1098-C form?

Generally, the IRS 1098-C form must be filed with your tax return for the year in which the donation was made. For most individuals, this means having the IRS 1098-C submitted along with your annual tax return, typically due on April 15. Keeping track of your donation timelines ensures that you don’t miss the deduction opportunities associated with the IRS 1098-C.

What if my charitable organization doesn’t send me an IRS 1098-C?

If you don't receive an IRS 1098-C from the charity after making a donation of a vehicle, boat, or airplane, you should reach out to them for clarification. Charitable organizations are required to provide this form if the donation meets reporting thresholds. It's important to have this form to support your tax deductions related to your donations.

Can I deduct more than the value listed on my IRS 1098-C?

Typically, you cannot deduct more than the fair market value listed on your IRS 1098-C for non-cash contributions. The IRS has specific rules regarding the valuation of donated items, and it’s crucial to follow these guidelines. Attempting to deduct more than the reported value can draw scrutiny during audits, so it’s best to follow the limits set by the IRS.

What forms do I need when filing taxes with an IRS 1098-C?

When filing taxes with an IRS 1098-C, you’ll typically need Form 1040, where you will report your charitable deductions, as well as Schedule A if you are itemizing deductions. It may also be advisable to include Form 8283 for larger non-cash donations exceeding $500. Being thorough in your paperwork and keeping all necessary forms organized eases the tax filing process.

Author:

by Iryna Marchuk

Lead Writer/Blogs Manager at airSlate

Disclaimer: This content is for informational purposes only. It is not legal or other professional advice. airSlate provides this material on an "as-is" basis and disclaims all representations, guarantees, or warranties, whether express, implied, or statutory, including but not limited to warranties of merchantability, fitness for a particular purpose, or accuracy.