by: Daniel Richards
Anytime that you donate a car you are helping out a worthy cause. If done properly when you approach car donation services it could be beneficial when it comes to tax time. 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 and your bottom line at the same time. Although the laws regarding car donation services have changed, this is still a good way to help yourself and others too. Before you actually jump in headfirst and donate your car I recommend that you check out the laws in your area.
In 2005, the laws changed regarding tax deductions on boats, vehicles or airplanes that are valued over $500. Now, the car donation services charity must provide written documentation or acknowledgment 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 car donation services 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 for those who decide to donate a car.
Even though the old laws had some problems, many charities are skeptical about the new car donation laws. A lot of organizations are concerned about what might happen when the responsibility of tax deduction is put under the authority of the charity rather than the donor. Some of them have actually sent a letter to the Treasury Secretary that suggests that people may be discouraged from donating cars if they aren’t aware of the deduction amount that will be allowed. This, they fear will mean that some donors will be lost. Charities feel that donors must be able to weigh the cost of benefit in order to know if it is enough for them to donate a car.
If you do decide to donate a car, 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
Daniel Richards has an interest in Automobile related topics. To access more information on vehicle donation or how to donate a car to charity please visit this site http://www.infactual.com
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