Car Donations Could Mean Tax Savings - How to Maximize Tax Benefits
By Daisy Wilson
Car donations could lead to tax savings - if you go about it in a careful way or it could turn out to be a total loss with the wrong people using your car and you not being eligible for tax deductions either. When you see hoardings luring you to allow the people advertising to help you donate your car you should steer clear away from them. Because any hoarding, billboard or advertisement yelling donate a car can only be a business by itself. When you think of donating your car you want to have some deserving person use it. Any individual or organization offering to help with the car donations has to be in it for monetary profit. After all, someone is paying for the advertisement and that someone could possibly be you. When you contemplate car donations you do so for two reasons. First you will benefit through tax exemptions to the tune of the total market value of your car. This is a sure shot way of getting the full market value for your used car when other buyers will bargain and haggle over the price. However, you can only avail of this tax benefit if the charity you donate car to is listed as one of the eligible charities by the revenue authority. If they are not, you cannot claim tax exemption and you lose your car too. This is one good reason to keep clear off intermediaries who offer their assistance in your car donations. These people take a substantial cut from the deal and this cut is not eligible for tax exemption. Rather what is left of the value after their deductions is what you can claim tax exemptions from, which may be lower than twenty percent of your car value - meaning you may have well sold your used car to the lowest bidder. A 'donate a car' exercise should be primarily to ensure that a deserving charity or individual gets it. Tax exemptions are just an added attraction of the whole exercise. Many charities could do with car donations and they really need some good cars for their daily work. So if you want to donate your car you should get around to doing some research on which charities really need your car and how many cars have they had donated to them in the past year. Go for the charity that has the least donations and try to even out the scales. There are many legal issues one must guard against when considering a vehicle donation program. In order to ensure that the parking tickets and other charges do not come to you after you donate the car, it is best to deliver the car personally to the charity. Get a pre-formatted receipt for the car mentioning the date and the time the car was handed over. Then report the transfer to the traffic authority. Ensure that the charity gives you a receipt for the sale of the car. This is because if your tax deduction claim exceeds 500 USD, the tax authority is going to want to see receipts - your word will just not do. To avail maximum tax benefits, choose to donate a car or any other vehicle such as a boat or even a truck, whether it is in running condition or even if it isn't, to a nationwide service specializing in car donations. This is one measure of judging it is an authentic auto donation program. Article Source: http://EzineArticles.com/?expert=Daisy_Wilson
http://EzineArticles.com/?Car-Donations-Could-Mean-Tax-Savings---How-to-Maximize-Tax-Benefits&id=3710042
| 