Donate Car for Tax Credit
Donation of Car or any other vehicle to charity is very significant contributing in charity. Some people contributing in charity for their life time and some of them are very motivation. People always want to ensure that they receive maximum allowable tax deduction.
1. Authorized Organization
Just pay attention when choosing a charity, eligible for a tax deduction! Car must be donated to a tax-exempt nonprofit organization. These organizations are mostly created for educational purposes, religious, or scientific purposes and some organizations work for the avoidance of cruelty to children and animals. Religious organizations i.e. churches and mosques qualify without filling 501(c)(3) application.
2. Standard Deductions
Car donation for a tax deduction only to eligible organizations must for public or charitable purposes. The medical expenses and charitable donations are on the schedule A of IRS 1040 Form. Receivers of standard deductions will not receive a deduction for their donation. The total itemized deduction for the year is more than the standard deduction. Donor must speak to your accountant or tax advisor for your specific circumstances.
3. Determination of amount Deduction
The actual amount of your deduction depends upon the organization/charity does with your car or other vehicle and depends on the value of your vehicle. If the charity uses the vehicle for its own may be for delivering food or other goods to needy or they give vehicle to needy person so your tax deduction is fair market value of vehicle. If the charity sale the car for more than $500 so the tax deduction would be as the final sale price of the car.
4. Required Documents
All the necessary documents will be needed to claim your deduction of tax which is only depend on the amount of deduction. For the deduction of $500 or less the IRS required in which all the information provided that is; the name of charity, description of donated car and a statement if goods and services were received and their value. The receipt will be issued by the charity and may be a legal substitution form 1098-C and can be used to input all required information asked by the tax software.
