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Donate A Car To Charity To Lower Your Taxes
Most people assume that donating a car to charity is something only the rich use to reduce their tax burden. Anyone can file a tax return with itemized deductions if they take the time and effort required to do so. You will be responsible for keeping any receipts to substantiate your deduction claims, donating a car to charity is now easier than ever.
Charity organizations have been reliant upon donated items for a long time, though this is only a small part of their overall donation dollars. According to a report issued by the General Accounting Office (GAO) in 2003, charity coffers were still little affected by the input of donated vehicles. As little as six percent of the "typical" charity was represented by car donation. This was at a time when levels of charitable giving was at its highest in terms of car donation.
As you will need to keep all the recipts for your car donation, the self employed will have an advantage as they keep receipts as a normal part of conducting their business. The forms you need to claim a deduction for your car donation to charity can be provided for you by the charities themselves. The organizations must have a not for profit tax ID and be sanctioned by the IRS.
A car donation to charity can be next to impossible for individuals claiming a standardized deduction. If taxpayers take the time to write down all the deductible items, thsis can improve the benefit received. The tax burden can be reduced by as much as thirty to forty per cent for those who usually take the standard deduction by keeping accurate records.
With the extra money available for donation that can come from car donation, charity giving can be very useful for bringing one's income down below the level where they might put you into a higher tax bracket. Near the end of the year there is often an increase in auto donation by those who are nearing a higher bracket they wish to avoid. This can save you quite a bit when done correctly.
As the charity sells the car onto the scrap or wholesale markets, the amount received will usually be nowhere near the Kelley Blue Book value for tha model car. If the amount recieved is more than $250, an accurate receipt showing the exact amount of the car donation value.
It is always a good idea to talk to a CPA, especially if you already have the services of one retained for your regular tax preparation advice. If you own a business, this is especially true. Even the same car donation to charity can vary greatly in its value to an individual's return.
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