Have you ever considered making a charitable car donation? What’s holding you back? Are you uncertain about how a car donation tax works? Donating a car to charity can be a very rewarding practice. It gives you a chance to help another person and allows you to donate a car you no longer have any use for and receive a tax benefit as well. The biggest reasons people avoid making a charitable car donation is that they think that filing the tax forms for the donation may be too much work and that they won’t really get much from the car donation tax. The truth is that it’s much easier than you might think.
How Does it Work?
A car donation tax is only available if the charity you donate it too has complete control over the charitable car donations they receive. The charities which do this are classified as 501 (c) (3) charities, be sure to ask if the group you’re considering donating to falls under thus classification in order to receive you car donation tax benefit.
The charity you donate to should give you proof that you gave them your car. This can come in the form of a paper, facsimile form, or an email from the charity. To file your car donation tax benefits you’ll need to do an itemized tax form and use form 8283 if your donation was over a $500 non-cash value. In the event that your charitable car donation wasn’t worth at least $500 and not part of a group of such donations you won’t need to file the claim.
If the charity you’ve donated to auctions the cars then your deduction will be for the value it was auctioned for or a minimum of $500. If it isn’t auctioned then your deduction will be for the market value of the car. Contact the IRS and your State Treasury Dept for the specific regulation or any questions you may have about the process.