Secrets To Getting The Most Money Out Of Charity Your Car
In the US it’s possible to donate a vehicle (while usually a car, it can be a boat or any other form of transportation) to certain charities, and in return be able to claim a tax deduction on your personal income tax return. For vehicle values of less than $500, the value of the tax deduction comes from the donor’s own estimate of the car’s value, even if the charity receives less money when they actually sell the car. If a charity is evasive, doesn’t welcome your questions and doesn’t provide clear answers about where the proceeds from donations go you might consider making your car donation to another charity.
The charity will give you some forms to fill out. You can give these to the driver when they come to pick up the car. One of the exceptions to the new IRS regulations allows donors to still deduct the fair market value of their vehicle when they fill out their income tax forms provided the charity materially improves the vehicle. Besides offline you can also donate your car online to individual charities or car donation programs. Checking with programs online can give you a chance to compare the individual charity benefits to you and more in-depth information on their programs.
The charitable organization uses the profit from they make from your vehicle to help fund their specific causes. There are a few exceptions in the new tax law regarding the fair market value section. For example, you may base your deduction on the fair market value of the vehicle if the charity sells it to a needy individual at a discounted price or if the charity uses the car as part of its mission instead of selling it. By donating a car it can eliminate unnecessary spending of money on repairs, advertising fees and the problems or liabilities associated with selling it.
Some charities that run the car donation program instead of hiring a middleman are discriminating about which vehicles they accept, repair and materially improve. They sell most of the vehicles at retail. You might have an old vehicle sitting around on your property or on the street that you don’t use very often or ever. You can usually donate a sad-looking car that is running, depending on the charity. If your car is in running condition, consider dropping it off at the charity yourself to save the organization from paying for towing costs.
If you donate your car and you don’t intend to deduct the vehicle donation on your tax return, no further action is necessary after the donation. A large chunk of your car donation money should not be taken out for large administrative fees or investments, so ask the charity first. In some cases charitable car donors can still claim the fair market value for their used vehicle. Make sure to have your title handy or at least know where it is when you call in your donation. Cars that are not being used make good donations, enabling many less fortunate people to have an affordable means of transportation.
You can get a car donation tax deduction up to the limits allowed by the IRS. Don’t let your unused vehicle go to waste just sitting around gathering rust. Repairable vehicles are accepted provided the vehicle is repairable for less than for what it could sell for.
Regardless of the laws, it’s a good idea to protect yourself by having the proper insurance coverage on your vehicle until it’s donated. And your vehicle must have all four of its tires inflated to be accepted. For states that require smog certificates or safety inspection certificates, you can certainly donate your vehicle without these documents.
The donor benefits from the vehicle donation by receiving a tax receipt for the highest possible value. When you donate a car, you know you’ll get it off your property within a couple of days or so, clearing out much needed garage, driveway or yard space. Oh and your vehicle must not have any major parts missing. If you think that donating an old car is a good way to ease your taxes then why not check into it today. And when you donate your car to a charity you’ll benefit in many ways.