DONATE CAR FOR TAX CREDIT: Donate Used Car Los Angeles Tax Deduction California Charities NJ Massachusetts of Your Choice Seattle

Donate Used Car Definition

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How To Choose The Right Charity For Your Charitable Car Donations And Charitable Donations In General

Car donation tax deduction is a very popular notion among those wishing to clear out their garage for a new vehicle, get rid of a vehicle that is too expensive to maintain and save on taxes. However, to ensure that it works out perfectly for all parties, it is vital to zero in on a charity that is just right for charitable car donations.

Do thorough research and make a list of the charities you would like to consider for charitable car donations. Then do further research on each. If tax deduction is your motive for charitable car donations, the first step would be to make sure that the charity you have in mind to donate your car is 501(c)3 IRS registered. If it isn’t, chances are they would accept your charitable car donations alright, but you wouldn’t get any tax deductions out of it. Tick them off the list. The nest step would be to finding out if the charity you are considering accepts charitable car donations in the first place. Once you have come down to a final list, choose a charity that is involved in the kind of welfare work you personally like or a mission you support. That should multiply your satisfaction at making charitable car donations.

Once you have tentatively decided on a charity to donate your car to, never be scared or hesitant to ask questions to the people there. Clear all your doubts, ask all that you want to know. Important points to clarify would be the percentages from the proceedings of the sale of your car that would go towards overhead (sometimes this is a very high percent) and towards welfare services of the charity. You are also free to ask about the charity’s funding and expenses policies. In case the charity you are considering for making the charitable car donations to insist that you retain ownership rights of the vehicle, this is probably not the right place.

Almost the same rules apply in case of general charitable donations. We all receive innumerable requests for charitable donations over post, email and phone. We can’t give to everybody. And it’s fine to say ‘no’. Again, charitable donations make you feel good about yourself part from the fact that it’s our moral duty to help our community and the less fortunate. It’s important to choose. On what basis would you choose? It’s a great idea to listen to your heart in this respect. Support a charity that does the work you feel strongly about – providing homes to the homeless, education of needy children, protection of stray animals, women’s issues, whatever cause it might be. Some people like sticking to one charity, some like trying out several and divide their donatable money among the ones they like. Both ideas are fine.

However, while you are listening to your heart, don’t ignore your brain. Do thorough research on the charity you are making donations to. Make sure you are not giving away hard earned money to a con artist!

Happy donating!

Charity Car Donation And Tougher IRS Rules – Implications

The basic tax procedure is that IRS allows for certain standard deductions from the gross income (i.e., income earned by a person in the financial year) of an individual and then based on the income range, applies a certain percentage of tax on the taxable income (i.e., gross income less the standard deductions).

Apart from this, IRS also allows for certain itemized deductions and car donation tax deduction is one among them. The “car donation” is termed as a “non cash charitable contribution” and IRS provides for tax benefits on such non cash expense. You would qualify for a car donation tax deduction if your total deductions are greater than the standard deductions received for you, your spouse and children (if applicable).

Since the government lost millions in taxes because of large inconsistencies between the claimed value of the donated car and its actual worth, the government put its foot down strongly and limited deduction amounts for donated vehicles as well as defined penalties for fraudulent acknowledgments provided to taxpayers.

Now, the exact car donation tax deduction would be based on how the charity uses the vehicle. If the organization plans to sell the vehicle, the benefit derived from the car donation tax deduction would be equivalent to the gross proceeds the organization obtained from the sale. However, if the organization plans to use the vehicle for “significant” tax approved charitable work as deemed by law, the donor can claim the fair market value of the vehicle for the car donation tax deduction.

If the organization sells the vehicle, one of the following will apply:

If the vehicle sells for $500 or less, then as the donor, you may deduct what you consider as the fair market value of the vehicle or the actual amount for which the vehicle was sold, whichever is less.

If the vehicle sells for more than $500, then the actual selling price of the vehicle is what you can deduct as car donation tax deduction.

The shortcoming of the new rule is that the donor is unsure of the amount that they would obtain as car donation tax deduction at the time of making the donation. However, advantages are that this rule eliminates the tedious process of having to determine the fair market value of the vehicle to be donated and also the risk of the donor getting into trouble by overstating the value of their car donation tax deduction while itemizing to file income tax returns.