Tax Deductions For Car Donations

Making a car donation to charity can is a easy and effective way to get a tax deduction. Thanks to a new tax law that went into effect in January 2005, the IRS has taken the job of determining the value of your car donation.

Charities are able to more efficiently provide services such as providing research money for medical research or locating missing children, because of the generosity of those who donate. In particular, donating automobiles has become a popular way for Americans to show their generosity and help society and their fellow man.

This is great since the IRS is determination of the value this will remove any risk of you having tax audit issues by overstating the value of your automobile donation on your on your federal tax return. You will know exactly the amount you may deduct, removing any guess that other wise you would have had to make on the correct price. This saves you a lot of time and the risk factor of you car donation.

The IRS allows you to claim a certain tax deduction on your charity car donation see bellow:

• The value of your truck or automobile, up to $500
• If the charity sells the truck or automobile for more than $500, the charity should mail you a statement indicating the exact amount for which it sold. That is the amount of tax deduction you are entitled to under federal law.

When you donate a car to charity make sure you obtain a receipt it is important since you will want to have this information to confirm anything that may arise concerning your tax deductions car donation.

Charities that sell your truck or automobile for more than $500 should then contact you and inform you of the vehicle's value for tax purposes. Which is your tax deduction for your truck or car donation.

For additional information about car donation programs, the IRS provides guide to Car Donations, which states the manner in which the IRS requires you to assess the value of the donated property. This guide will contain all the information needed to get the exact price on your automobile donation. Using this guide will also make things easier when you decide to donate a car to charity and then later on gather the tax deduction information.