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 tax deductions lowered American consumers' tax liability by a whopping $654 million, according to IRS figures for 2000. Vehicle donations are increasingly common, with solicitations for donated cars routine by major charities.
While it is easy to find a charity that will take your gift, it is critical to understand new car donation tax law and how the vehicle donation process works. Otherwise, you cannot receive your car donation tax deduction.
By making careful decisions, taxpayers can provide support to favorite causes, dispose of unwanted vehicles and get tax breaks. But they must follow car donation IRS rules designed to keep taxpayers from inflating the value of donated vehicles.
Be prepared to answer the charity's questions about the vehicle. The charity will ask about the car's condition, mileage and age. If the charity collects the vehicle, it is likely to sell it for proceeds. The amount it receives will be your car donation tax deduction.
Gone are the days when every donor could use the fair market value as his or her car donation tax deduction.