Tax Advantages Of Donating A Car
Getting rid of that old car of yours could not get any easier. Car donations are on the rise and the IRS is giving incentives to those who choose to donate a car to charity. If you are considering what to give to charity read on to find out about the benefits of car donations.
True the tax laws have been through a lot of changes but that is still no reason for you not to make them work in your favor. A car donation can be a big help in this lame economy. One of the changes you have this tax season is that you only get two choices for credit on car donations. Either you donate to a standard charity or a non-profit organization.
The standard charities for car donations are the ones who by special grant from the IRS have 501-(c) (3) status. They have to be able to prove it too. When you get your receipt it has to have the number right on it. Otherwise you get no deduction.
These types of charities are allowed to actually sell the donated car for profit. The changes also affect the amount of this resale value you can actually claim. You have to get the resale info from the charity before filing. If it is 500.00 or less you get to claim it all, for more other rules do apply.
A non-profit on the other hand is not allowed to sell the car donations. They have to actually use it in their organization. This is a good thing since that will give you the right to claim the total book value of the car.
This means that if the car is valued at 3000.00 you get to claim that on your taxes. High value car donations are better if given to a non-profit. You get more benefit for the donation.
How does it work, you ask, if you itemize you can deduct the amount from your gross income at the top. Most often this will lower the bracket you get accessed in. this could mean you pay nothing in taxes or a whole lot less than in previous years. You can get a clear view of this by talking with a professional tax preparer or CPA.
Most people use the Bluebook for the resale value estimate to get a better idea of how the market is actually going you can go on line. There is this great appraisal site called Edmund's TMV that has up to date figures.
Itemization is the key to getting the full benefit of car donations. Although there are consideration of your income, need and other factors. Go online to the IRS website to get the full explanation or speak with your tax preparer.
Car donations are only one part of the vehicle equation. You can donate boats, planes and motorcycles. You can even donate jet ski's to charity. A car donation is truly a way to give back to the community and help you at the same time.