Read this tip to make your life smarter, better, faster and wiser. LifeTips is the place to go when you need to know about Car Donation Tax Deduction and other Car Donation topics.
Car donation programs are popular vehicles for charities to raise funds. Car donations appeal to taxpayers who want to get rid of used vehicles and take the tax deductions. IRS rules give specific guidelines for taxpayers seeking a car donation tax deduction.
There are several steps to take to meet car donation tax law.
* First, verify that the recipient organization is tax-exempt.
* If the vehicle is worth $500 or less, you can deduct its fair market value at tax time.
* If the vehicle is worth more than $500, your deduction is the amount the charity gets reselling the car. There are special exceptions to this rule.
* Finally, research and know state laws regarding title transfers for car donations.