The Car Donation Tax Deduction Process Explained
Are you confused on how to get your tax deduction for donating your car? Don't worry, you are not the only one. Many generous donors have decided to donate their car to various non-profit organizations. However, here are some guidelines to follow when getting a tax deduction for your car donation.
1. Use Kelley's blue book to determine the fair market value of your car. It would be wise to give a lower estimate for the value of your car because the IRS will never use the highest value. Your car accessories, mileage and condition will also affect the value of your car.
2. Find a reputable tax-exempt charity to donate your car or truck. Your vehicle donation proceeds benefit the charity you choose and the less fortunate are able to buy the car at a charity auction. The total amount of your tax deduction is based on final sales price of your vehicle.
3. The towing company will give you a tax deduction receipt for your vehicle donation. Make sure that the receipt has the organizations name and address, fair market value for your car and the date. If the car is worth more than $500, the IRS will require a IRS Form 8283.
4. Your car than is sold at an auction. Contact the car donation organization to find out any other details about your car. Then you will be able to add your car donation on your tax return! The process is simple. If you follow these steps, you can live happily every after knowing you helped the less fortunate and made your life a little bit easier.