Most of you would be looking at car donation as an option in order to attain one or more of the following objectives:

• Dispose your old car in a way such that it is useful to others
• Avoid the hassles and expenses related to selling your car
• Avail the car donation tax deduction while filing your income tax

Whatever your intentions might be, you can make use of these tips to help you donate your car and make the action worthwhile and beneficial either to you or to a charity organization.

• Check the legitimacy of the charity. You will have to be sure that it is eligible for receiving donations for car donation tax deduction purposes. Also, if your intention is to benefit the needy, you might want to check if the charity is genuine and for what purpose they intend to use your donation. Donation to organizations that have nation-wide services might reduce the risk of you getting involved with fraudulent charity or non-profit organizations.
• While donating your car, you should ensure that it is useful either to you or…

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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…

Continue reading " Charity Car Donation and Tougher IRS Rules – Implications "

Donating a car has more to it than charity – it means that you are about to take your first step towards availing a car donation tax deduction for the financial year that is taxable to you. In most cases, it could be simple; however, the tax payer’s situation determines how effectively the deduction can be utilized.

How does car donation tax deduction work?

Donating a car or any other vehicle to a charitable or non-profit organization is tax deductible as donating any other item of value. It should create a tax deduction equivalent to its commercial value. However, the actual effect of this donation on your tax is based on the following factors namely:

- The tax bracket that you belong to

- The value of the donated car or vehicle

The tax bracket that you belong to depends on your total taxable income for the financial year. However, irrespective of your tax bracket, your car donation tax deduction is definitely going to cause an impact on your total tax payable.

The value of the donated car or vehicle is…

Continue reading " Car donation tax deduction information and IRS resources "

IRS provides room for car donation tax deduction, by which you can avail a tax benefit by donating your car or vehicle. If you are planning to avail this benefit and wondering how to go about it, here are some good car donation tax deduction tips.

Ensure that the charity or non-profit organization is qualified:
 If you donate to a non-qualified organization, you cannot avail car donation tax deduction for your donation.
 The Publication 78 in the IRS website consists of a comprehensive list of most organizations that are qualified to receive tax deductible donations. It is better to collect the correct details of the organization’s name and if possible its headquarter location before checking the details in IRS website.
 You can also ask the organization for their IRS’s “Letter of determination” that will confirm their status.
 Please note that certain organizations such as churches, mosques, temples and government organizations are not required to register and hence they might not be found in the list. However, they still might be qualified. You could check with your…

Continue reading " Best Charity Car Donation Tax Deduction Tips "