Tired seeing your old car in the driveway? Do you want to get rid of it and at the same time reap some financial benefits from the old clunker? Then you will want to consider donating your car for tax deduction to end up paying less money to Uncle Sam.
Automobile Donation Programs - Companies vs. Charities
If you avail of automobile donation programs, they typically accept not just cars, but trucks, motorcycles, campers, RVs, trailers, motorhomes, boats, and airplanes. Many of the these programs also accept automobile donations for recycling. Using one of these services, which will typically come to your home and tow your old car for free, is a smart way to avoid hassles of disposing unwanted vehicles. These companies specialize in collecting just about any vehicle, no matter the condition, and will oftentimes accept inoperable vehicles as well. Companies benefit by selling junk cars for valuable parts. Oftentimes they will pay you for your old junk car. When you donate cars for charities, they do not really care if it needs major repairs because sell the autos and trucks for their parts at auctions. Sometimes, vehicles are sold at a cheaper price to other people in need.
Get Maximum Tax Benefits of Car Donation
To receive maximal benefits come Tax Time, it is suggested to search online for a charitable organization that is registered as a non-profit organization where the donation will be used "in direct furtherance of the organization's charitable purpose." Usually what this means is that the car will either be used for business purposes or donated to a needy client.
It is important to take note of one main point when you donate car for tax deduction. The actual amount you are able to write off on your taxes depends not only on the value of the vehicle, but possible the way that the charity puts the car to use. If the car is worth more than $500 according to the Kelley Blue Book value and the charitable organization decides to sell it, it may influence how much you are able to claim for your tax deduction.
Verifying the eligibility of your chosen organization for tax write off purposes is a must. Make sure your chosen organization is listed as a qualified charity with the Internal Revenue Service (IRS). You may also want to consult an used-car buying guide to determine the market value of your car. As always, keep your documentation in a safe place in the event that you have to submit official paperwork to the IRS.
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