A car donation in Chicago made to a nonprofit organization can be written off for a fairly large tax deduction. Charitable tax deductions can be a big plus when it comes time to file for taxes. If you are interested in giving back to your community while being able to file for a tax deduction, here are a few things to keep in mind.
- In order for a donation to be tax deductible, the car donation in Chicago must be given to a qualified organization. Qualified organizations have a status of 501(c)(3) which means they are ran as a nonprofit. If you are unsure of your organization's status, you can check the IRS’s website for nonprofit charities.
- The write-off for your donated car or vehicle depends on how the organization will use it. Depending on how the organization plans to use your vehicle you will get a different amount of money for your donation. Some organizations will use the vehicle to drive around kids and others will sell the vehicle and use those funds for their charity.
- Remember that not all donations are tax deductible. Donations of any kind made to political organizations, candidates or specific individuals cannot be deducted. Also, if you obtained something in exchange because of your contribution, you can only deduct the amount subtracting what you received as a “gift” for your car donation in Chicago.
- If the vehicle you donate is worth more than $5,000, you need an independent appraisal. The person who made the vehicle donation must also fill out Section B of IRS Form 8283, so they are able to receive the most possible amount for their car donation. You should also take pictures of the car you are donating, so you have proof of the appearance and quality of the vehicle before you give it away.
- Document everything! If the organization does not offer you a receipt for you donation, be sure to ask for one. If the total tax deduction you are claiming is $250 or more, you will need paper proof of your car donation. You should also keep copies of all paperwork you sign or send to the organization.
If you want to receive a tax deduction for your car donation in Chicago, keep these 5 tips in mind. For more information about how to donate car to a charity that can provide you with tax deductions, go to http://www.rawhide.org/car-donation-chicago/.