Donate car for tax credit: The Donate-a-Car Program wants to reassure donors that because the proceeds of their donations will help fund non-profit organization’s missions, this charitable contribution will make them eligible to claim a tax deduction. Your motivation may be an act of convenience or benevolence, either way it’s important to be assured that you could obtain the maximum tax credit allowed.
The tax law that took effect back in January of 2005 has helped make things less confusing. Because of the IRS, car donation is now less complicated in determining your cars value. Before 2005, tax benefits of donating a car were based on inflated book values, which tend to get less reliable as the car becomes older. With this new law, the amount you can deduct for your vehicle donation is precisely related to the amount it sells for.
Thinking of donating your clunker to charity for a nice tax deduction? Proceed with caution.
Donate car for tax credit
The gifting of used cars to “charities” has become a favorite way for Americans to dispose of unwanted vehicles. And why not? You can avoid the headache of selling or junking the car, help a charitable cause and lower your tax burden all at the same time.
Unfortunately, the experience is rarely, in reality, such a win-win situation. Not only do charities typically see little of the proceeds from a used car sale, but donors can run afoul of the taxman if they’re not careful.
Select the right charity. If you want to claim a tax deduction for your donation, you should make sure that the charity or organization is qualified, otherwise, you can’t claim a tax deduction for your donation. The most qualified charities are section 501(c)(3) organizations like religious groups, educational and charitable organizations. To verify if the charity is qualified, you can check the IRS website “EO Select Check” tool, or you may also call the IRS tax-exempt division toll-free at (877) 829-5500. When calling, make sure that you have the charity’s name and address.
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