When we are planning to buy a brand new car we always think what to do of our old car, now a day many people chose to donate their old car to the charity. By donating one can help others which provides mental peace of improving community as well as donating for charity also give you tax benefit.
Till 2005, the donator was able to deduct the whole FMV (fair market value) of car from their taxable income, but then IRS agency modified the rules by which you can deduct FMV in specific conditions. By putting vehicle’s all details like model, year, condition, etc. on fair market value calculating web sites one can get a clear idea about cars valuation.
There are thousands of organizations which accept donations for children, old peoples, physically challenged, poor. The fund coming from your car donation is going to help them in supporting various life changing services providing programs. But before donating a car be sure about organization that they are recognized for working in benefit of community.
In many countries car donation system is constructed which helps donator. But sometimes something goes wrong and it becomes a great issue. The ideal way is to find the trusted options to donate a car. Well, you need to consider some important things before you actually donate your car. Here are car donation tips those will definitely help in your worth valued task.
Avoid Car Donations Scams
Car donation is really a most respectable decision. But remain away from scams. You just see the ads where you can donate your car and your car is being used for the charity. Confirm whether they are really taking your car for charity or for personal purpose. Avoid such type of scams and for this you can check the authenticity of the charity or person acting as an agent. You can check it with local Better business Bureau.
If possible avoid the middlemen. Look for the charitable trust those are ready to take your car for charity. If possible sign the vehicles title directly to the charitable organization and by avoiding transferring it to the agents or middlemen. If the charity want to sell the car donated by you, ask them how the funds raised by selling the car will be used.
Donate Car To Reputable Trusts Only
Only a registered and reputable charitable organization can issue a tax receipt. So be sure that you are donating a car to right authority where you are sure to get tax receipt acceptable by income tax department.
Car Donation Tax Deduction
Well, the car donated to reputable trusts offers you a tax receipt. The deduction for donating a car is based on the fair market value of the vehicle after depreciation. You can calculate the fair market value of your car online by supplying necessary details like year of the car, condition of the car, etc. The tax receipt of donating a car must carry a date of the donation, the fair value of the vehicle, etc.
There are several rules of donating car, you can go through them in IRS Publication 4302. Follow the rules properly so that the donations you make benefit you. Otherwise, it will be a mere sale of your car and the charity will not get anything out of it. And you will not be able to enjoy benefits in your tax.