Use caution when making and automobile donation
Since 2004 laws regarding the donation of automobiles has changed. The IRS urges people to do their homework before making their donation.
There are a few things that you will want to do first
- Check that the charity is fully qualified as a non-profit organization. This is critical to be eligible for the tax deduction. People in the US can consult the IRS website for an updated list of registered charities. Publication 78 is the best resource for determining if the charity you are considering donating to is registered. You can also call the IRS at
1-877-829-5500.
- Calculate the fair market value of the vehicle. There are several sites that you can use to determine the value of your donation. They take into account the year, mileage and other accessories that effect the overall fair market value. Other publication such as
Publication 526, Charitable Deductions, and Publication 561, Determining the Value of Donated Property can also help.
- Be careful to only deduct the fair market value of the donation and not the highest used car site value. You will only be able to deduct the fair market value.
- For vehicle donations, taxpayers must document the car donation and its fair market value. Documentation requirements vary depending on the amount of the contribution and the total amount of the charitable deduction. Publication 526 details requirements for the types of receipts taxpayers must obtain and the forms they must file.
By doing your research before you make your automobile donation you are more likely to be able to deduct the value of the vehicle and still help out the charity of your choice. |
