Tax DeductionsIf you choose to donate your car or another type of vehicle to a 501(c)(3) organization you should know that the IRS allows you the value of the vehicle up to $500 as a tax deduction. There are, of course, many rules that may apply to your vehicle so you'll need to do a little research to determine just how much value you can claim on your tax return.
If the Car Is in Working ConditionIt is probably best if the car is in good working condition for you to drive the car directly to the charity of your choice. This will save them from having to enlist the services of someone to pick-up or tow the vehicle themselves. This could be an additional expense that they could avoid just by you arranging for the deliver yourself, although some organizations are very much willing to pick up the car for free.
Make Sure Your Paperwork Is in OrderIt is important that your paperwork is prepared correctly so that you don't trigger any audits. This is especially important if your car is valued for more that $250 but does not exceed $500. If the value of your vehicle exceeds this amount you will be required to obtain a written acknowledgement from the charity. And if the amount exceeds $500 but not more than $5,000, you must complete section A of the IRS Form 8283 and include that with your yearly taxes. If the value of the vehicle is more than $5,000, you will also be required to have an independent appraisal and complete section B of the IRS Form 8283.
Take Your TimeIt can be very fulfilling to make a charitable contribution to a cause that you care deeply about. However, if you try to go through the process hastily, chances are you'll lose some of the joy in the end. If you take your time and take care of all the paperwork in an orderly manner, paying attention to details, you will discover the satisfaction of making your car donation Madison charities are looking for without hassle.
As we continue to face the many challenges that this world has to offer, there will also continue to be many people that are in need of our assistance. However, as the economy is still struggling to regain its footing, having the cash on hand may not be possible for many of us. Being able to make a car donation Madison charities are in need of may be the easiest way for us to give what's in our heart. We just need to remember that it is wise to take the proper steps so that we do not create more problems than we are trying to fix. Here is a great article to help you understand tax laws when donating your car in Madison, WI: http://www.rawhide.org/donations/vehicle-donations/understanding-tax-laws-youre-ready-donate-car-madison-charities-get