Making a charitable donation can be very satisfying, especially substantial donations such as vehicle donations. While that good feeling certainly is nice, few people would turn down the opportunity to also have a deduction on their taxes when they donate a vehicle. Fortunately, most charities try to make it easy for you to get both when you donate a vehicle.
Before 2005, you were able to claim the fair market value for any vehicle donation, no matter how much the vehicle sold for. It was often time-consuming and confusing to determine the vehicle’s market value, and the IRS changed the tax law to take the guesswork out in January 2005. Now, you can still claim the market value if that value is $500 or less, but if you plan to claim more, you can only claim as much as the charity sells the vehicle for. They can usually give you an estimate of how much they expect to sell it for, but you will not know the amount that you can claim until the charity actually sells the car and gives you the necessary paperwork. Receipts for vehicle donations will have the date that you made the donation, so even if they do not sell it until after the new year, you can claim for the year that you made the donation.
A charity that has been established for a while and that has experience accepting vehicle donations and selling cars will likely be able to get you the highest tax deduction. One such charity for vehicle donation Madison is Rawhide Ranch. They provide family-centered care to at-risk youth. Rawhide has accepted vehicle donations for over 30 years, and a large portion of their funding comes from those vehicle donations. They make it easy by allowing you to fill out a donation form online, then they will pick the vehicle up from a location of your choosing within 48 hours. They also give you a receipt and notify you of the amount when they sell the vehicle.