Because of the difficulty of selling a used car, and their overall poor valuation for trade-in purposes, more and more people are choosing to donate their used vehicles to charity. If you are considering a car donation, it is important that you are able to identify legitimate charities. Donating your car to a government certified charity will not only protect you from exploitation but will also provide you with a car donation tax deduction Madison when you file your next Federal Income Tax return.
Car Donation Charities Madison
In order to be considered a charitable entity, organizations must register with the government and meet a few guidelines in order to qualify:
- All charitable organizations must be eligible for federal tax relief guidelines as defined by the Internal Revenue Service. This would mean that the organization has "tax exempt" status. Some individual states place additional regulations on charities.
- The organization must not participate in any political campaigns or support any particular candidate for public office.
- The earnings from the organization must not benefit any specific individual.
- A charitable organization may be a private foundation that obtains most of its funds through a corporation, family or individual. These organizations are likely to provide grants to outside entities that support the mission of the foundation. It is unlikely that this type of organization would solicit vehicle donations. These kinds of charities are sometimes referred to as "non-operating".
- Operating foundations and public charities are more likely to solicit in-kind donations like cars and other vehicles. They are eligible to receive government as well as private monies. These organizations may be affiliated with private foundations; but, they are generally most concerned with tax-exempt activities that serve the public good.
- The operating documents of the organization must specify its purpose to be strictly dedicated to charitable activities on a permanent basis.
- Charities that have obtained tax-exempt status are also known as 501 (c)(3) organizations. This designation refers to the sections of Internal Revenue Service code that allow them to operate without taxation.