Car Donation Tax Reduction

by: RayLam
Total views: 35 | Word Count: 351

Any donation you make to help out a worthy cause can also help you with your taxes. If you have an old car parked in your garage and you don?t know what to do with it, car donation is a wonderful way to help a charity. Although the car donation laws have changed, this is still a good way to help yourself and others too.

In 2005, the laws changed regarding tax deductions on boats, vehicles or airplanes that are valued over $500. Now, the charity must provide written documentation or acknowledgement within the 30 days of processing your donation. If the charity gives an exaggerated or false statement, they can be fined or penalized.

Under the January 2005 rules, your tax break is based on how the charity uses the donated vehicle. If the car is sold, the gross sale price can be deducted. If the charity uses the donated car following the new law for ?significant? charity work that is tax approved, you?ll be able to deduct the market value of the vehicle. However, some stiff penalties will be charged for falsified documents. The law is watching carefully those charities not following the rules and regulations involved with car donation.

If the car you donate is sold for less than $500, it is up to you to determine the fair market value as long as the figure is below $500. The tax receipt that the charity is required to send you will be less detailed and will merely acknowledge your donation. The information included on the tax receipt will be your name, the date of the donation and a brief description of the vehicle.

If you do decide to pursue car donation, you will find out that the process is easy. You can contact most charities by phone or online. It is important to ask the charity you wish to get involved with for some specific and important information. This is necessary in order to avoid complications and also be sure you understand the process. It?s not hard, but does require you to fill out some important information and get the car ready.

About the Author

Learn about colorado car donation by visiting http://car-donation-advisor.info and get a FREE limited report on "Car Donation Programs" by visiting http://car-donation-advisor.info,a website providing free advice on how to donate your car