Car Donations That Are Tax Deductable

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Car Donations That   Are Tax Deductable

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Summary:
With the start of the New Year and tax time right around the corner you
are probably looking for items that you can deduct to reduce your taxable
income. Since the laws on what can be claimed vary from state to state
and country to country there is a lot of confusion about what a deduction
can be. In the US the Internal Revenue Service (IRS) has many documents
that can be use to determine what can and cannot be a deduction.

One aspect of tax deductions that is increasing i...


Keywords:
donate my car,car donation,donate cars,vehicle donation,automobile
donation,car donation with cash


Article Body:
With the start of the New Year and tax time right around the corner you
are probably looking for items that you can deduct to reduce your taxable
income. Since the laws on what can be claimed vary from state to state
and country to country there is a lot of confusion about what a deduction
can be. In the US the Internal Revenue Service (IRS) has many documents
that can be use to determine what can and cannot be a deduction.

One aspect of tax deductions that is increasing in popularity has been
car and vehicle donations. A simple process that both the donor and the
charity can benefit from. A perspective donor gives a vehicle to a
registered charity. That charity does one of several things with it.

• They can sell off the vehicles in running order and use the proceeds to
fund their organizations.

• If the vehicle is not on running order it may be repaired or sold as
scrap.

Either way the charity benefits from the donation and so do the worth
while causes they support.

It is a simple process, however, as a donor you have to determine a
couple things before you can legally write off any contributions made by
donating your car.

First you   have to be eligible to receive the tax deduction. This can be
as simple   as itemizing the deductions on Schedule A of Form 1040. However
there are   other limitations that you must be aware of before simply
deducting   the donation.
• Does the vehicle you are intending to donate qualify as a tax exempt
vehicle? This is obviously important and there is a good chance that it
will. Most vehicles that are legal for public roads are able to be used
as a tax deductible donation. This also includes boats and planes plus
some all terrain vehicles.

• The percentage you can claim. Since you are only able to claim up to
50% of your current gross yearly income you are limited if you are
donating a vehicle such as a plane that can be worth thousands or tens of
thousands of dollars.

• For contributions between $250 and $500 there is less information
required to deduct the donation. The acknowledgement form from the
charity will have to contain the following.

o Name of the charity
o Vehicle Description
o Plus one of the following

- A statement saying you never received any goods or services for your
donation. Or…

- A statement provided from the charity with a description and fair
market value of goods or services they may have provided to you. Or…

- If goods or services were provided in the form of non-tangible services
(ex: :religious advice) this must be stated.

• For donation amounts that exceed $500 you will need to gather
additional information before trying to deduct the donation amount. When
you receive the written acknowledgement from the charity it must contain
additional information.

o Your name and Tax Identification Number
o The vehicle identification number must be present.
o The date of the vehicle donation must be included
o One of the following must also be included with the date of the
donation

- A statement saying you never received any goods or services for your
donation. Or…

- A statement provided from the charity with a description and fair
market value of goods or services they may have provided to you. Or…

- If goods or services were provided in the form of non-tangible this
must be stated.

-The charity itself must have tax exempt status with the Federal
Government. Most education and religious organizations are tax exempt.
The IRS maintains a particle list of those organizations that have tax
exempt status. Go to the IRS website and search for Publication 78,
Cumulative List of Organizations. This will be your best place to start
for determining which charities you can donate to and receive a tax write
off.

The charity itself must have tax exempt status with the Federal
Government. Most education and religious organizations are tax exempt.
The IRS maintains a particle list of those organizations that have tax
exempt status. Go to the IRS website and search for Publication 78,
Cumulative List of Organizations. This will be your best place to start
for determining which charities you can donate to and receive a tax write
off.

By following the guidelines provided by the IRS and the charity you
choose to donate to you can help out those organizations in need plus you
are able to help yourself out with a tax deductible donation. Just
remember to follow the rules and both parties involved will win.

				
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Mike Ward Mike Ward Senior Project Manager http://thezumbavideos.com/
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