A car donation tax write-off is the biggest reason for you to donate your car to charity instead of choosing to sell it. Donating your car has a lot of advantages. Apart from the satisfaction of having done a charitable deed, you are also not faced with the huge expenses that are usually associated with repairing your vehicle before selling it. But for most people today, a tax deduction is worth more than anything else. Here are a few steps on how to obtain a car donation tax write off.
Find a Reputable Organization
The first thing you need to do when you decide to donate your car is to find a charitable organization that's registered. You need to beware of scams where some organizations take cars and do not use them for charity purposes. Hence, a reputable charity institution is the first requisite for making a car donation.
Calculate the Value of Your Deduction
The value of your car donation tax write off depends on two major factors, namely the value of your car and the tax bracket you fall into. While the value of your car depends on the fair market value calculated by donation processing companies, you do not have much control on the tax bracket you fall into. However, you cannot be sure of the specified value of your deduction unless the car is sold by the charity.
File the Necessary Documentation
In order to file for a car donation tax write off, it is necessary that you take pictures of the vehicle you donate and also obtain a donation receipt stating the value of your donation. In case your vehicle sells for more than $500, you will also be provided with an IRS form 1098-C stating all the details along with the sale value of your donated car.
Donating a car has far less complications than those associated with the sale of a car. Moreover, it benefits you as well as the less privileged.