Donating your vehicle to charity can help you when taxation
time comes around and its also a great way to help many people
that are in absolutely need. The following tips will help you understand your obligations, and what is required to get the charitable donation credited on next years taxes.
Do You Itemize Your Taxes?
In order to receive a taxation
credit for your charitable car donation you have to itemize your tax deductions using Schedule A of the IRS tax form 1040, if youre not sure check with your taxation
advisor.
Make Sure Your Charity is Qualified by the IRS
Charitable organizations are typically classified as 501(c) (3) organizations by the IRS. If youre not sure about the status of the charity that you would like to donate your vehicle to you may look them up on the IRS website, www.irs.gov, or you can give them a call, (877) 829-5500.
Whats Your Vehicle Worth?
You can only deduct the fair sell
assessment of worth
for your vehicle. This is a relatively new change to the tax law; do not
just make use of
the Blue Book assessment of value. The assessment of value you claim for your donation will also determine the type of data
you will have to record and the tax forms that you will have to file with your taxes. For example, if you claim the assessment of worth
to be $250 or less you will need to record the name and address of the charity, the date of donation, the place where you donated the car, and a description of the car. If the assessment of worth
of your vehicle is greater than $250, but not more than $500, you will need to request a written acknowledgement from the charity. If its worth over $500, but not over $5000, you will need to record all of the previously mentioned information, as well as filing Form 8283, Section A with your taxes. Anything over $5000 and you will need to record all the understanding required for the previous categories, as well as a written appraisal from a qualified appraiser, and Form 8283, Section B filed with your taxes.
What About Title and Registration?
In most cases you will want to transfer the car name
to the charity youre creating the donation to. Make a copy of the title transfer and generate sure your registration understanding on document
in with your State is updated to reflect the transfer. And finally, remove your license plates from the vehicle you are donating, this can help you avoid future liabilities following the title transfer.
